2005 DECA Ontario December Provincials
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL)
1
1. What effect do tariffs and other trade barriers usually have on retailers?
A. They tend to lower prices, so that these goods sell very quickly.
B. They can raise or lower prices, depending on the circumstances.
C. They raise prices, making it more difficult to sell those goods.
D. They have little or no effect on prices; goods sell as well as they would otherwise.
2. A furniture store manager who helps an employee decide when and where products should be delivered
performs which management function?
A. Directing
B. Controlling
C. Staffing
D. Organizing
3. When preparing a cash flow statement, calculate a bookstore's cash receipts if it has $3,500 from cash
sales, $4,750 from credit sales, $1,400 from personal checks, and $200 from interest income.
A. $6,300
B. $5,100
C. $8,450
D. $9,850
4. Coordinating all of a department store's resources in order to enable the company to reach its goals is
known as
A. management.
B. organizing.
C. planning.
D. controlling.
5. Retailers regularly evaluate and compare the figures in their original budgets to the actual figures in order
to
A. establish quotas.
B. change investments C. make adjustments.
D. follow procedures.
6. What technological development has increased retailers' efficiency in regard to inventory management
and price verification?
A. Radio frequency data communications
C. Videoconferencing system
B. Automated checkout machines
D. Electronic kiosks
7. Which of the following do many appliance stores include on their web sites in order to obtain feedback
from customers:
A. Electronic file attachment
C. Return e-mail option
B. Portable document format
D. Computer programming code
8. Providing retail employees with secure lockers can help to prevent employee theft because it
A. helps employees to be well organized.
B. keeps personal items out of the sales area.
C. treats all employees in the same manner.
D. keeps the store neat and orderly.
9. One procedure that gift shops can follow in order to safeguard the cash is to
A. take the cash home.
B. count the money in a public place.
C. carry money in a bag marked "money bag."
D. keep a low amount of cash in the cash register.
10. What do many home improvement stores require their employees to do after an accident occurs?
A. Help redesign the work areas
C. Complete accident-report forms
B. Attend a safety-training program
D. Participate in counseling sessions
11. Which of the following is a trade regulation that limits the number of foreign-made goods that may be
imported monthly:
A. Quota
B. Tariff
C. Embargo
D. Inspection
12. The focus of most letters that a department store writes to its customers should be about the
A. store's history.
C. customers' interests.
B. store's services.
D. customers' opinions.
Copyright © 2006 by Marketing Education Resource Center ®, Columbus, Ohio
2005 DECA Ontario December Provincials
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL)
2
13. Which of the following is an acceptable reason to send an office memorandum:
A. To wish an employee a happy birthday
B. To announce the addition of a new product
C. To order merchandise from a vendor
D. To establish a personal friendship line
14. A large retail chain often transports shipments of goods from one location to another by using its own
A. cars.
C. trucks.
B. planes.
D. rail carriers.
15. Which of the following is not a distribution channel intermediary:
A. Consumer
C. Agent
B. Wholesaler
D. Retailer
16. A manufacturer who wants a retailer to carry a new product might pay the retailer a slotting allowance to
cover the cost of
A. mail-in rebates.
C. sales incentives.
B. licensing fees.
D. cents-off coupons.
17. The most efficient and secure way to exchange customer information inside a retailer's electronic
network is by using a(n)
A. telephone.
C. intranet.
B. extranet.
D. e-transaction.
18. Why are receiving schedules, along with price, discounts, and shipping terms, important factors for
retailers to negotiate with vendors?
A. They affect retailers' profitability and cash flow.
B. Strong retailers always dictate their own terms.
C. Vendors do not understand retailers' needs.
D. Retailers should never let vendors get the upper hand.
19. What type of carrier should a large appliance manufacturer use for its shipping needs if it is concerned
about having control over delivery times and handling procedures, and flexibility in changing routes,
schedules, and delivery times to meet customer needs?
A. Private
C. Exempt
B. Contract
D. Common
20. What type of goods are large retail chains most likely to store in central warehouses?
A. Items that are easy to transport
C. Items that have a limited demand
B. Items that are small and inexpensive
D. Items that have a long shelf life
21. When a hardware store plans merchandise storage space based on its products' sales-productivity ratio,
it is called the
A. curving traffic pattern.
C. storability product grouping.
B. model stock approach.
D. stock turnover warehousing method.
22. The purpose of planning to take a physical inventory after the toy store closes is to
A. indicate what items are selling well.
B. help the store control its accounting costs.
C. determine the age of the items on hand.
D. obtain a more accurate count of items on hand.
23. Which type of retail inventory system would record inventory information by using a scanner that "reads"
a symbol known as a UPC or bar code?
A. Materials
C. Periodic
B. Perpetual
D. Finished-products
2005 DECA Ontario December Provincials
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL)
3
24. A retailer that decides to monitor the value of inventory to keep track of the cost of goods sold is
developing a(n) __________ inventory control system.
A. dollar
C. unit
B. profit
D. expense
25. One aspect of coordinating the distribution of a product with other marketing activities involves
A. analyzing customer satisfaction.
C. developing an operating budget.
B. setting an appropriate price.
D. recruiting qualified personnel.
26. The best way to evaluate the channel members in an international supply chain is often by using a(n)
A. global distribution center.
C. global industry benchmarking system.
B. international monetary fund.
D. international trade center.
27. Sam has been invited to go to the movies with one friend and to Dairy Queen for ice cream with another
friend. Because he has only $5.00, Sam can't do both. If he decides to go the movies, the opportunity
cost of his choice is
A. ice cream at Dairy Queen.
C. staying at home.
B. both the ice cream and the movie.
D. the movie.
28. If the demand is so great that consumers will buy regardless of price, a(n) __________ market exists.
A. equilibrium
C. seasonal
B. buyer's
D. seller's
29. Which of the following is not an advantage of the private enterprise economic system:
A. Profit motive
C. Limited government control
B. Private ownership
D. Unequal distribution of income
30. Operating expenses are defined as the
A. cost of goods sold.
B. salaries paid to managers.
C. costs of running a business.
D. start-up expenses of a business.
31. The amount of work that an individual can produce in a given period of time is a measure of
A. job simplification.
C. division of labor.
B. worker productivity.
D. specialization.
32. The low point of economic activity occurs during which phase of the business cycle?
A. Trough
C. Peak
B. Recession
D. Valley
33. Retail chains that want to trade with foreign countries need to understand the __________ of those
countries.
A. cultural characteristics
C. environmental aspects
B. historical significance
D. geographical landmarks
34. As the department store credit manager, you are concerned about whether a credit applicant should be
granted credit since the applicant's employer may soon go out of business. Which of the following are
you considering:
A. Commitment
C. Character
B. Capital
D. Capacity
35. Retailers who are unable to collect past-due accounts from customers after a certain amount of time may
place a __________ on those accounts.
A. tax
C. hold
B. claim
D. price
2005 DECA Ontario December Provincials
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL)
36. Which of the following is an advantage of conducting telephone interviews to obtain marketing
information:
A. Reaches the target market
C. Asks easy questions
B. Is speedy and cost-effective
D. Allows for depth interviewing
37. Why do retailers gather marketing information?
A. To fill data banks
B. To participate in market research
C. To use in decision making
D. To establish information systems
38. A large music store with locations in many cities probably would develop a marketing-information
management system that had extensive __________ capabilities.
A. opinion sampling
C. data-processing
B. product development
D. cultural analysis
39. Which of the following is an example of an unethical method of collecting marketing information:
A. Contacting customers in a single geographic area
B. Surveying a limited group of similar respondents to represent a broader universe
C. Calling a wide variety of consumers at home with survey questions
D. Interviewing randomly selected participants
40. What are retailers conducting when they analyze the market in order to determine who their potential
customers are, where they are, and how many there are?
A. Project review
C. Business plan
B. Feasibility study
D. Blueprint
41. Calculate the mean using the following statistical table:
Numeric Value of Response
6
5
4
3
2
1
Number of Responses
8
12
16
14
9
6
A. 2.9
B. 3.3
C. 3.7
D. 4.1
42. A bicycle manufacturer changed its commission structure for salespeople in order to increase sales of
high-priced products. This change is an example of a
A. strategy.
C. quota.
B. tactic.
D. goal.
43. What factors should a retail chain consider when researching the level of technology in a country?
A. Measurement systems and electric voltage standards
B. Presence of plastics and metal-producing factories
C. Geographic location of the country
D. Current companies that sell products in that country
44. To buy a product, customers in a market must first
A. learn the product's features.
B. make sure the product is on sale.
C. locate the product in a store.
D. be willing to buy the product.
4
2005 DECA Ontario December Provincials
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL)
5
45. Which of the following is an important part of a department store's marketing plan:
A. Purchasing policies
C. Operating systems
B. Human resources
D. Promotional activities
46. Which of the following is a source of information for qualitative methods of forecasting sales:
A. Customer surveys
C. Market research
B. Industry experts
D. Economic trends
47. Which of the following marketing-plan objectives might provide the most increase in revenue for a
furniture store:
A. Reach more customers to increase sales by 20%
B. Decrease the salaries of all employees by 10%
C. Increase prices by 50% across the board
D. Impose a 5% surcharge on customers who pay on credit
48. Analyzing whether the toy store is making an acceptable profit on the sale of its products is one way to
evaluate its
A. marketing plan.
C. capital resources.
B. inventory level.
D. accounting department.
49. In every work environment, employees need to rely on one another for various reasons. This means that
these workers are
A. independent.
C. interrelated.
B. interdependent.
D. dependable.
50. A discount store salesperson walking through a department with which s/he is unfamiliar is questioned by
a customer. The salesperson should
A. tell the customer where to find assistance.
B. locate an employee who can assist the customer.
C. attempt to answer the customer's question.
D. politely say, "Sorry, I don't work in this area."
51. A bookstore develops policies to guide the way employees act because the way employees treat
customers affects the bookstore's
A. image.
C. capital.
B. credit.
D. inventory.
52. Employers may legally do all of the following to monitor their personnel except
A. search their personal residence.
B. observe employees in the company cafeteria.
C. listen to employees' telephone conversations.
D. read employee e-mail marked "personal" or "confidential."
53. Which of the following is an example of a flexible 40-hour weekly schedule in which discount store
employees are required to be on the job from 10:00 a.m. to 2:00 p.m. Monday through Friday:
A. Mary works 11:00 a.m. to 3:00 and 4:00 p.m. to 8:00 p.m.
B. Bob works 11:00 a.m. to 7:00 p.m.
C. Sue works 7:00 a.m. to 12:00 and 2:30 p.m. to 5:30 p.m.
D. Jim works 7:00 a.m. to 3:00 p.m.
54. A form of compensation other than wages is an employee
A. transfer.
C. manual.
B. benefit.
D. house organ.
2005 DECA Ontario December Provincials
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL)
6
55. What do department stores often consider when identifying future hiring needs?
A. Recruitment process
C. Interview length
B. Selection technique
D. Estimated turnover
56. Which of the following employee-selection documents contains a series of questions developed by the
employer to obtain information about prospective employees:
A. Résumé
C. Application
B. Letter of inquiry
D. Letter of application
57. The main purpose of an exit interview is to
A. convince the employee not to leave.
B. determine the employee's attitudes and feelings about the retailer.
C. determine the employee's wage at the time of termination.
D. prevent legal action.
58. A systematic study of a job's tasks, responsibilities, and place in a hardware store chain is known as
A. implementation.
C. job rotation.
B. job analysis.
D. job-knowledge skills.
59. One of the ways in which managing diversity contributes to the home improvement store's success is that
the store will be able to
A. reduce its productivity levels.
C. create a homogeneous workforce.
B. attract and to retain talented workers.
D. make managers' jobs easier for them.
60. Calculate a gift shop's profitability ratio if its net profit is $150,000 and its net sales are $875,000.
A. 20%
C. 19%
B. 15%
D. 17%
61. What is the percent of increase in net profit from last year to this year if a music store had a net profit of
$35,500 on sales of $270,000 last year and a net profit of $50,000 on sales of $330,000 this year?
A. 13%
C. 2%
B. 4%
D. 15%
62. Which of the following often helps employees to make the best use of their time while on the job:
A. Strict supervision
C. Organized work area
B. Shortened lunch break
D. Limited communication
63. You are explaining the variety of career opportunities available in retailing to a group of students that is
visiting your store. Which of the following is a statement that you could use to summarize retailing
careers:
A. Careers in retailing are so varied that you can work anywhere you desire in virtually any specific
job role.
B. Careers in retailing offer the opportunity to work only in stores or in warehouses.
C. Retail careers are found in retail stores and confine one to a given location on a daily basis.
D. Retail careers offer the opportunity to progress from one store to another.
64. Which of the following often is directly affected by the price producers charge for their goods:
A. Selling place
C. Fiscal policy
B. Balance sheet
D. Economic state
65. Charging premium prices for lumber to hurricane victims because supply is limited is
A. unethical and legal.
C. ethical and legal.
B. unethical and illegal.
D. ethical and illegal.
2005 DECA Ontario December Provincials
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL)
7
66. Which of the following is an example of bait-and-switch advertising:
A. Handling products that are sold on the gray market
B. Selling goods at prices that are below cost
C. Promoting discounts on large quantity purchases
D. Offering low-priced goods that are unavailable
67. A candy company offers a retailer a 15% promotional discount for placing a point-of-sale display near the
checkout. If the candy costs $5.70 per box, what will be the net cost per box if the store takes advantage
of the promotional discount?
A. $5.61
C. $8.55
B. $4.48
D. $4.84
68. If a video game that sells for $20.00 is marked down 20%, what is the game's new selling price?
A. $12.00
C. $16.00
B. $15.50
D. $19.40
69. A promise made in a specific statement concerning the quality of a product is called a(n) __________
warranty.
A. implied
C. full
B. express
D. limited
70. Which of the following statements would be true of a specialty store with a narrow product mix:
A. It can offer a variety of product lines.
C. It will also have a shallow product mix.
B. It can concentrate its marketing efforts.
D. It will not produce efficiently.
71. One reason why some retailers bundle products is to
A. offer discounts on products that are selling well.
B. sell products that customers might not otherwise buy.
C. promote the sale of expensive accessory products.
D. price unpopular products below cost to reduce inventory.
72. Which of the following situations would not justify including delivery service as part of the retailer's
service mix:
A. Purchase of over-the-counter drugs
C. Purchase of building materials
B. Purchase of home appliances
D. Purchase of mail-order products
73. One way that an appliance store's product gains a competitive advantage over a competitor's similar
product is by providing a
A. matching trait.
C. unique value.
B. like benefit.
D. standard image.
74. Which of the following products are sometimes sold as generic items:
A. Sporting goods
C. Cars
B. Bicycles
D. Paper goods
75. In addition to a store's physical facilities, the level of personal service it provides, how it offers credit, and
how it accepts returns can dramatically affect the retailer's
A. merchandising planning.
C. promotional approach.
B. employee/customer ratios.
D. atmosphere.
76. A reason to legally research possible brand names is to
A. ensure that the name is adaptable to displays, signage, and advertising.
B. avoid selecting a name that is unpleasant.
C. make sure the name will stimulate customers' buying habits.
D. avoid selecting a name already in use by another business.
2005 DECA Ontario December Provincials
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL)
8
77. Evaluating new products to see whether they will meet your customers' needs and support the retailer's
image should be part of preparing a retailer's
A. past sales records.
C. perpetual inventory records.
B. merchandising plan.
D. merchandise classifications.
78. Calculate a drugstore's open-to-buy from the following information: end-of-month planned stock, $28,000;
planned sales for the month, $15,000; stock on hand, $30,000; planned purchases, $13,000; and stock
on order, $5,000.
A. $38,000
B. $10,000
C. $18,000
D. $8,000
79. Which of the following trade publications would be useful to retail buyers in selecting goods and services:
A. USA Today
B. Business Week
C. Daily News Record
D. Wall Street Journal
80. The budget that is used by a retailer in planning the supply of products to be purchased for resale is
called the __________ budget.
A. capital
B. advertising
C. merchandising
D. cash
81. What is one way that promotion benefits the economy?
A. Provides jobs
B. Offers information
C. Creates images
D. Builds confidence
82. A local newspaper reporter interviewed the manager and employees at Harrison Electronics about the
latest in audio and video equipment available to consumers. The article appeared in the business section
of the Sunday newspaper. What type of exposure did Harrison Electronics receive?
A. Publicity
C. Promotion
B. Public relations
D. Product mix
83. A department store that sponsors a sweepstakes promotion and exaggerates the retail price of the grand
prize is engaging in unethical behavior known as
A. price discrimination.
C. cost fixation.
B. benefit exploitation.
D. value misrepresentation.
84. The copy in the advertisement for a new photocopier discusses the different functions of the equipment.
Which copy technique is being used?
A. Endorsement
B. Benefit
C. Claim
D. Feature
85. Why do many consumers, even though they like being more than just "one of the crowd," take issue with
advertisers' increasing use of databases to target them?
A. They are not comfortable with the fact that advertisers may group them with other consumers
toward whom they feel superior.
B. They are looking for more efficient and streamlined processes to ensure that advertisers'
information is accurate.
C. They are uncomfortable with advertisers having personal information about them in their
computers and are unsure how it got there.
D. They feel advertisers do not have enough of the right kinds of information about them and want
to provide more.
86. The major purpose of visual merchandising is to
A. provide guidance for the consumer.
B. obtain publicity for the business.
C. enhance public relations.
D. stimulate demand and increase sales.
87. Which of the following is a reason why display workers should handle display goods carefully while
dismantling displays:
A. To shorten the dismantling time
C. To keep the goods salable
B. To reduce cleaning costs
D. To use the goods in another display
2005 DECA Ontario December Provincials
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL)
88. Interior display signs that provide customers with product information serve as
A. shelf extenders.
B. warranties.
C. silent salespeople.
9
D. fixtures.
89. One of the last steps in the promotional planning process is
A. setting promotional objectives.
C. evaluating the results of the plan.
B. selecting the promotional mix.
D. deciding how much money can be spent.
90. Selling is important to the American economy because it helps to
A. keep our standard of living static.
C. create desire for goods and services.
B. increase prices of products.
D. control competition.
91. Which of the following is a function of customer service that salespeople for furniture manufacturers can
use to build relationships:
A. Evaluating performance
C. Telephoning daily
B. Entertaining often
D. Showing appreciation
92. George went to the record store to buy the latest Usher CD which the cashier told him was on sale.
George went to Brent's house and told him about the sale. As a result, Brent bought the same CD from
the record store. Which of the following benefits of building a clientele has occurred:
A. Repeat sales
C. Referrals
B. Personal satisfaction
D. Word-of-mouth advertising
93. What should sales managers for toy manufacturers do to make sure their salespeople are being ethical in
their dealings with customers?
A. Lower the sales objectives
C. Develop a control system
B. Hire entry-level employees
D. Create a legal department
94. What is an advantage of using spreadsheet software programs to track and evaluate sales?
A. Identifies potential customers
C. Quickly analyzes numerical data
B. Easily generates purchase orders
D. Creates future sales contracts
95. Governments often develop selling regulations to protect the rights of
A. relationships.
B. customers.
C. products.
D. objectives.
96. An important purpose of the sales talk as a step in the selling process is to
A. convince the customer of the product's benefits.
B. demonstrate the salesperson's selling skills.
C. provide a minimum amount of product information.
D. close the sale as quickly as possible.
97. Department store salespeople use questioning to identify customers' needs and suggest additional items
in order to
A. give information.
B. promote benefits. C. increase sales.
D. explain features.
98. Checks drawn by authorized bank officers on their own banks are referred to as __________ checks.
A. traveler's
B. certified
C. cashier's
D. government
99. If greeting cards are priced "3 for $3.95," what is the price of one card?
A. $1.32
B. $1.31
C. $1.33
D. $1.34
100. The territory sales reports for a chain of hardware stores indicate that Territory A achieved 98% of quota,
Territory B achieved 99% of quota, and Territory C exceeded quota by 5%. What were Territory C's sales
if the quota for each territory was $1,345,750?
A. $1,413,037.50
C. $1,409,958.00
B. $1,332,292.50
D. $1,318,835.00
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
10
1. C
They raise prices, making it more difficult to sell those goods. The United States and other countries have
long battled over a free trade environment versus imposing tariffs (additional fees) on each other's goods,
and other trade barriers. In general, we tend to impose fewer tariffs on goods we import from other
countries and, thus, sell many, many foreign goods. On the other hand, some other countries, such as
Japan, have historically imposed tariffs and other trade barriers on U.S.-manufactured products and,
therefore, do not sell nearly as many of our products. NAFTA, or the North American Free Trade
Agreement, took huge steps toward eliminating trade barriers between the U.S., Mexico, and Canada but
still includes clauses that allow the imposition of tariffs in certain situations, e.g., when a particular
industry is threatened.
SOURCE: BA:066
SOURCE: Cateora, P.R., & Graham, J.L. (1999). International marketing (10th ed.) [pp. 27-28]. Boston:
Irwin/McGraw-Hill.
2. A
Directing. Directing is providing guidance to workers and work projects. An example of directing would
include a furniture store manager assisting employees with product deliveries. Controlling involves
monitoring the work effort. Staffing involves finding workers for the business. Organizing is setting up the
way the business's work will be done.
SOURCE: BA:002
SOURCE: MB LAP 10—Business Activities
3. B
$5,100. Cash receipts are the monies that a bookstore collects, e.g., business income. Cash receipts
include cash from such things as the sale of goods and services, loans, the sale of assets, and interest
income. Cash receipts include only collected money, not money that will be received in the future such as
from credit sales. Therefore, to calculate cash receipts for a cash flow statement, add the totals from
cash sales, personal checks, and interest income ($3,500 + $1,400 + $200 = $5,100).
SOURCE: BA:017
SOURCE: Meyer, E.C., & Allen, K.R. (2000). Entrepreneurship and small business management:
Teacher's manual (2nd ed.) [pp. 366-367]. New York: Glencoe/McGraw-Hill.
4. A
Management. Management involves putting together everything the department store has to work with in
order to reach its goals. Planning, organizing, and controlling are all functions of management. Planning
is deciding what will be done and how it will be accomplished. Organizing is setting up the way the store's
work will be done. Controlling is monitoring the work effort.
SOURCE: BA:022
SOURCE: BA LAP 6—Manage This!
5. C
Make adjustments. A budget is only as successful as the retailer that evaluates it on a regular basis.
When store owners want to know if they are accomplishing their goals, budgets show where they are on
target and where they are not. By comparing original budget figures to actual figures, managers can find
out if they are spending more than allocated on certain activities and then make adjustments. For
example, if a retailer spends most of its advertising budget during the first six months, it knows that it will
need to cut back in that area or take money from other activities. Retailers do not evaluate their original
budgets in order to change investments, establish quotas, or follow procedures.
SOURCE: BA:024
SOURCE: MN LAP 59—Nature of Budgets
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
11
6. A
Radio frequency data communications. This system can be used in many applications. For example, a
portable scanner can be attached to a handheld electronic device. The device records inventory counts,
determines low-stock items and automatically reorders products from vendors, and verifies product
pricing. Electronic kiosks are on-site merchandising tools. Automated checkout machines are point-ofsale systems where the customer completes a sales transaction electronically. Videoconferencing refers
to the ability to transmit visual and oral communication by satellite.
SOURCE: BA:080
SOURCE: Lewison, D.M. (1997). Retailing (6th ed.) [pp. 124-125]. Upper Saddle River, NJ: Prentice
Hall.
7. C
Return e-mail option. Many appliance stores provide a feedback option on their web sites that enables
customers to e-mail the store concerning problems or to ask questions. The return e-mail option is an
effective method of providing customer service as long as the store responds in an appropriate amount of
time. A portable document format allows users to view files created by another operating system. An
electronic file attachment allows a user to send an attachment with an e-mail message. Computer
programming code is used to create software, web pages, etc.
SOURCE: BA:214
SOURCE: Strauss, J., & Frost, R. (1999). Marketing on the Internet: Principles of online marketing
(pp. 270-271). Upper Saddle River, NJ: Prentice Hall.
8. B
Keeps personal items out of the sales area. Retail employees who are required to keep their purses,
backpacks, helmets, lunch boxes, outerwear, and other personal items in a secure locker are less likely
to try to steal items and conceal them in those personal belongings. It does not prevent theft, but it makes
it harder to carry out. Providing lockers also helps employees to be organized, keep the store neat, and
treat all employees in the same manner, but none of those factors deter theft.
SOURCE: BA:043
SOURCE: Lewison, D.M. (1997). Retailing (6th ed.) [p. 321]. Upper Saddle River, NJ: Prentice Hall.
9. D
Keep a low amount of cash in the cash register. The gift shop manager should deposit the large bills in a
safe place to reduce the amount of unprotected money in the cash register. Managers should not tempt a
potential thief by counting money in public, carrying money in a marked bag, or taking the cash home.
SOURCE: BA:087
SOURCE: German-Grapes, J. (1997). The teller's handbook: Everything a teller needs to know to
succeed (pp. 151-152). New York: McGraw-Hill.
10. C
Complete accident-report forms. Many home improvement stores 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: BA:047
SOURCE: RM LAP 3—Handling Accidents
11. A
Quota. Quotas limit the amount of a good that may be imported or exported. A tariff is a tax on imports.
An embargo is a total ban on goods coming into or leaving a country. Inspections of imported goods are
sometimes used as a trade barrier to slow down the importation of certain products and potentially raise
the price.
SOURCE: BA:057
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)
[pp. 101-102]. Woodland Hills, CA: Glencoe/McGraw-Hill.
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
12
12. C
Customers' interests. Department stores' letters to customers should have a "you" perspective. The
letters may include information about the store's history and/or services, but these factors should be
linked to meeting customers' needs. In most cases, customers' opinions are not known by stores and
cannot be addressed.
SOURCE: CO:133
SOURCE: Wray, R.D., Luft, R.L., & Highland, P.J. (1996). Fundamentals of human relations:
Applications for life & work (p. 158). Cincinnati: South-Western Educational.
13. B
To announce the addition of a new product line. The main form of written communication within an
organization is the memorandum. Businesses use memos to provide information that is needed by
company employees, such as the addition of a new product line. Personal matters, such as friendships
and employee birthdays, should not be the subject of memorandums. A request for merchandise would
be placed through a purchase order.
SOURCE: CO:094
SOURCE: Lesikar, R.V., Pettit, J.D., Jr., & Flatley, M.E. (1999). Lesikar's basic business communication
(8th ed.) [pp. 204-212]. Boston: Irwin/McGraw-Hill.
14. C
Trucks. Many large retail chains, such as Kmart, own fleets of trucks that they use to transport goods
from one business site to another. Motorized carriers such as trucks are faster but more expensive to use
than rail or water carriers. Even very large retail chains do not own rail carriers. Cars are too small for use
in transporting goods, and planes are too expensive to use on a regular basis.
SOURCE: DS:001
SOURCE: DS LAP 1—Distribution
15. A
Consumer. Consumers are the targets of channel intermediaries such as wholesalers, retailers, and
agents. Channel intermediaries are used in indirect channels of distribution to perform specific functions
in the movement of goods from producers to consumers.
SOURCE: DS:055
SOURCE: MB LAP 3—Channels of Distribution
16. D
Cents-off coupons. A slotting allowance is a cash premium that manufacturers pay to retailers to cover
the costs involved in carrying a new product. The money is intended to pay for such expenses as the cost
involved in offering cents-off coupons to encourage customers to try the new product. A slotting
allowance also pays for shelf space, store advertising, and penalties if the product doesn't sell.
Manufacturers often pay licensing fees to sports teams or famous people in order to use their names or
logos on products. Sales incentives are bonuses or awards given to employees who meet or exceed their
sales quotas. Mail-in rebates are a sales promotion activity that involves the manufacturer returning part
of the price a customer pays for a good or service.
SOURCE: DS:059
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p. 305].
Woodland Hills, CA: Glencoe/McGraw-Hill.
17. C
Intranet. An intranet is a local electronic network linking personal computers within a certain retailer.
Information flows across the intranet but does not go outside of the company infrastructure. Extranet and
e-transactions are designed to allow information flow across the Internet to outside businesses and
customers. A telephone is not part of a retailer's electronic network.
SOURCE: DS:056
SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2001). Marketing (12th ed.) [pp. 630-639].
Boston: Irwin.
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
13
18. A
They affect retailers' profitability and cash flow. When merchandise is received, how long it is held and
how quickly it gets to stores and the selling floor are all important factors to retailers' bottom lines. So are
the price paid for merchandise, discounts, and the terms of having the merchandise shipped to them.
Vendors are operating according to a set of criteria beneficial to their business needs; therefore, it is
important for retailers to leave nothing to chance and negotiate all aspects of the purchase, shipping, and
receiving processes. Although there often are conflicting interests, it is not a question of either the vendor
or retailer "getting the upper hand." Smart retailers and vendors form long-term partnerships in which
both parties work to satisfy the other's requirements. Vendors do understand retailers' needs but often
have business/profitability requirements of their own, which make meeting retailers' needs not always
easy. Retailers are focused on the needs of their own operation and bottom line; however, in the spirit of
partnership, they do not dictate terms unless absolutely forced to.
SOURCE: DS:038
SOURCE: Dunne, P., Lusch, R., & Griffith, D. (2002). Retailing (4th ed.) [pp. 337-338]. Mason, OH:
South-Western.
19. A
Private. Private carriers provide control over delivery times and handling procedures, and flexibility in
changing routes, schedules, and delivery times to meet customer needs. Common carriers are more
suitable for less-than-truckload shipments transported over major highways. Contract carriers set their
own schedules and routes and offer less flexibility. Exempt carriers commonly carry agricultural products.
SOURCE: DS:045
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)
[pp. 395-396]. Woodland Hills, CA: Glencoe/McGraw-Hill.
20. D
Items that have a long shelf life. Retailers store merchandise in different types of warehouses depending
on the type of goods. Central warehouses are effective for items that have a long shelf life.
Manufacturers can ship merchandise to central warehouses where the goods are processed and stored
until the retail chains need them delivered to the various locations. Since the items have a long shelf life,
retailers are not concerned with spoilage. Retail chains store small, inexpensive, and easy to transport
items in central warehouses; however, the main concern is that they have a long shelf life rather than
their size, value, or ease of transporting. Items that have a limited demand, such as fad or seasonal
items, often need to be moved to stores immediately or they lose their appeal.
SOURCE: DS:087
SOURCE: Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.)
[pp. 380-381]. Upper Saddle River, NJ: Prentice Hall.
21. B
Model stock approach. The model stock approach bases merchandise storage on the sales rate and
volume of items. For example, a line of shovels with high sales receives more space on the floor and less
storage in the warehouse facility. A hammer that sells slowly might get more storage space and less
visibility on the sales floor. A curving traffic pattern refers to the layout of the store and its merchandise
and how it relates to the way customers move throughout the facility. A curving pattern is when a store
places displays and merchandise in a free-flowing manner. Storability product grouping is the method in
which certain categories of merchandise must be stored. For example, a grocer stores dairy products in a
refrigerated unit. The stock turnover warehousing method is not a way to plan storage space.
SOURCE: DS:039
SOURCE: Berman, B., & Evans, J.R. (1998). Retail management: A strategic approach (7th ed.)
[pp. 561, 564]. Upper Saddle River, NJ: Prentice Hall.
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
14
22. D
Obtain a more accurate count of items on hand. Waiting until the toy store is closed to take a physical
inventory count allows for a more accurate count because there is time to return items to their proper
locations. Determining the age of the items on hand cannot be accomplished by simply counting the
items in stock (i.e., taking a physical inventory). Indicating what items are selling well would best be
accomplished by referring to the store's sales records. The store's accounting costs are not related to the
time of day in which physical inventories are conducted.
SOURCE: DS:024
SOURCE: Bond, R. (2001). Retail in detail: How to start and manage a small retail business (2nd ed.)
[pp. 133-135]. Central Point, OR: Oasis Press.
23. B
Perpetual. Perpetual inventory control systems in large retail companies are generally computerized and
use a scanner to read the UPC or bar code to record inventory information. Periodic inventory control
systems actually count the items. Materials inventory is stock used by a business in the production of
other goods. Finished-products inventory is the producer's inventory of finished products that are ready to
be marketed.
SOURCE: DS:019
SOURCE: DS LAP 2—Inventory Control Systems
24. A
Dollar. The dollar inventory control system is a method of keeping track of inventory according to the
value of the stock. This system monitors information about the cost of purchases, the amount of sales,
and the value of shortages to keep track of the cost of goods sold. Retailers use this information to
calculate profit and loss. A unit inventory control system is a method of keeping track of inventory
according to the number of physical units of stock rather than the value of the stock. Profit and expense
are not types of inventory control systems.
SOURCE: DS:092
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p. 438].
Woodland Hills, CA: Glencoe/McGraw-Hill.
25. B
Setting an appropriate price. Setting the price of a product is one of the marketing activities that a
business should coordinate with distribution in order to successfully sell to customers. Not only does a
business need to make its product available, but it also must sell it at a price that consumers are willing to
pay. If a product is not priced appropriately, customers usually will not buy it even if it is widely
distributed. Businesses often analyze customer satisfaction after a product is marketed to determine if
any changes need to be made. Developing an operating budget and recruiting qualified personnel are
not marketing activities.
SOURCE: DS:048
SOURCE: Evans, J.R., & Berman, B. (1997). Marketing (7th ed.) [pp. 654-655]. Upper Saddle River,
NJ: Prentice Hall.
26. C
Global industry benchmarking system. A global system provides a standard rating system with which to
evaluate the effectiveness of international channel members. Because of the cultural, social, and political
differences that exist outside of a company's national boundaries, the company's norm may not apply in
these cases. A neutral third party familiar with international expectations may be a better judge of the
channel member's effectiveness. The International Monetary Fund deals with exchange rates and
differences in international currency. International trade centers and global distribution centers are
examples of international channel members.
SOURCE: DS:051
SOURCE: Czinkota, M.R., & Kotabe, M. (2001). Marketing management (2nd ed.) [pp. 354-355].
Mason, OH: South-Western Publishing Co.
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
15
27. A
Ice cream at Dairy Queen. The opportunity cost is the alternative that is given up when a choice is made
about the best use of resources. In this case, Sam's $5.00 is the resource, and the alternative he gave up
is the ice cream at Dairy Queen. The movie is the alternative he chose to spend his $5.00 resource on.
Staying at home was not an alternative Sam considered.
SOURCE: EC:001
SOURCE: EC LAP 6—Economics
28. D
Seller's. This situation is caused by a large demand and a relatively small supply which causes high
prices. A buyer's market exists when a large supply of a product and a small demand for the product
have resulted in low prices. Equilibrium exists when supply meets demand. A seasonal market involves
the sale of items that appeal to consumers only during certain times of the year.
SOURCE: EC:005
SOURCE: EC LAP 11—Supply and Demand
29. D
Unequal distribution of income. An unequal distribution of income is a disadvantage of private enterprise
that exists because workers with higher levels of education, training, skills, and efficiency generally
receive higher salaries than less qualified workers. The right to own property and make a profit are major
features of private enterprise. Limited government control protects individuals and lets them pursue their
own goals.
SOURCE: EC:009
SOURCE: EC LAP 15—Private Enterprise
30. C
Costs of running a business. Operating expenses are all the costs of running a business on an everyday
basis and include such expenditures as payroll, rent, and utilities. Cost of goods sold is the amount of
money a business pays for the products it sells or for the raw materials from which it produces goods to
sell. Start-up expenses are the costs of opening a new business. Salaries paid to managers are
sometimes considered as part of operating expenses.
SOURCE: EC:010
SOURCE: EC LAP 2—Risk Rewarded
31. B
Worker productivity. Worker productivity is often measured by the amount of work produced in an hour or
a day. Specialization, job simplification, and division of labor are methods of increasing worker
productivity. Specialization is the process of making the best use of resources in the production of goods
and services. Division of labor is dividing a large job into units, or job tasks, and assigning an individual to
do each of the tasks. Job simplification is the process of making changes in a job task so that the job can
be done more easily or quickly.
SOURCE: EC:013
SOURCE: EC LAP 18—Productivity
32. A
Trough. A trough is the final phase of a business cycle and occurs when economic activities stop their
decline. This is the low point of economic activity because many more businesses fail, and unemployment is very high. The economy remains in a trough until consumers and producers once again become
more hopeful about business and buy more goods and services. The high point of economic activity
occurs during the peak phase of the business cycle. A recession may occur during the contraction phase
of the business cycle. Valley is not a phase of the business cycle.
SOURCE: EC:018
SOURCE: EC LAP 9—Business Cycles
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
16
33. A
Cultural characteristics. The cultural characteristics of a country include the customs, habits, and
traditions of the people who live in that country. Retail chains that want to trade with foreign countries
need to understand the unique cultural characteristics because the culture has an effect on what people
in other parts of the world want to buy. Some products need to be modified in order to make them
appealing to people in other countries. Also, the marketing techniques that a company uses may need to
be changed in order to conform to the way that business is conducted in foreign countries. Chains do not
need to understand the geographical landmarks, historical significance, or environmental aspects of
foreign countries in order to trade with them.
SOURCE: EC:045
SOURCE: Johansson, J.K. (2000). Global marketing: Foreign entry, local marketing & global
management (2nd ed.) [pp. 60-61]. Boston: Irwin/McGraw-Hill.
34. D
Capacity. Capacity is the ability to pay which would be affected by the applicant's employment. Capital is
the current financial worth of the applicant. Character is the applicant's honesty and reliability in meeting
his/her obligations. Commitment is not a factor in granting credit.
SOURCE: FI:020
SOURCE: Cole, R., & Mishler, L. (1998). Consumer and business credit management (11th ed.)
[pp. 168-170]. Boston: Irwin/McGraw-Hill.
35. C
Hold. Retailers often place a hold on accounts that are delinquent for a certain period of time. Placing a
hold on accounts means that delinquent customers will not be extended further credit and actually closes
the accounts until customers have paid the past-due amount. Retailers automatically have a claim on
past-due accounts because it is their money that has been loaned for the purchases. Retailers do not
place a tax or a price on past-due accounts.
SOURCE: FI:016
SOURCE: Cole, R., & Mishler, L. (1998). Consumer and business credit management (11th ed.)
[pp. 412-417]. Boston: Irwin/McGraw-Hill.
36. B
Is speedy and cost-effective. Some telephone interviewers can conduct as many as 10 interviews per
hour. Phoning also allows the same interviewer to reach a larger geographical area. As a result, it is fast
and inexpensive to obtain a lot of information in a short amount of time. The goal with interviewing is not
to reach the target market, but to identify it. Questions must be short and general, but they are not
necessarily easy. Depth interviewing is usually accomplished in person rather than on the phone.
SOURCE: IM:182
SOURCE: Entrepreneur.com, Inc. (2001, August 7). Researching your market.
Retrieved November 3, 2005, from
http://www.entrepreneur.com/Your_Business/YB_SegArticle/0,4621,291713,00.html
37. C
To use in decision making. Marketing information is vital to the decision making, problem solving, and
planning processes. Gathering information has become essential to the success of most retailers. It is not
an exercise in market research intended merely to fill data banks or set up information systems.
SOURCE: IM:001
SOURCE: IM LAP 2—Marketing-Information Management
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
17
38. C
Data-processing. The size of a retailer often has an effect on the sophistication level of its marketinginformation management system. A large music store with many locations would need a system that had
extensive data-processing capabilities because it would need to keep track of many customer transactions and financial information. Also, a large store might generate frequent reports and accumulate
extensive amounts of information that need to be sorted and tabulated. On the other hand, a small music
store might need only a simple system to handle routine information. Marketing-information management
systems do not have the capability of developing product, sampling opinions, or analyzing cultures,
although they might be used to store and sort such information.
SOURCE: IM:163
SOURCE: Sudman, S., & Blair, E. (1998). Marketing research: A problem solving approach (p. 34).
Boston: Irwin/McGraw-Hill.
39. B
Surveying a limited group of similar respondents to represent a broader universe. It is considered
unethical to obtain marketing information from only a limited group of people who have the same opinions
because the results of the survey will be biased. A few researchers collect information in this manner in
order to substantiate a predetermined point of view. This method is unethical because it is not legitimate
research but an attempt to use the predisposed opinions of a few people to support a broad claim. Most
researchers survey a broad range of respondents in order to obtain a variety of opinions. Calling a wide
variety of consumers, interviewing randomly selected participants, and contacting customers in a single
geographic area are ethical methods of collecting marketing information.
SOURCE: IM:025
SOURCE: Kotler, P., & Armstrong, G. (1997). Marketing: An introduction (4th ed.) [pp. 132-133].
Upper Saddle River, NJ: Prentice Hall.
40. B
Feasibility study. When a retailer conducts a market analysis, it determines who its potential customers
are, where they are, and how many there are, among other things. Once a retailer has completed this
step, it knows whether there is a sufficient customer base to support the enterprise. A feasibility study
helps a retailer decide if its business idea can become a reality. Once a retailer conducts a feasibility
study, it can develop a business plan, or a blueprint, for organizing and carrying out its activities. A
project review is a study of an existing business activity.
SOURCE: IM:128
SOURCE: Meyer, E.C., & Allen, K.R. (2000). Entrepreneurship and small business management:
Teacher's manual (2nd ed.) [pp. 76-77]. New York: Glencoe/McGraw-Hill.
41. C
3.7. The mean is the arithmetic average of the statistical sample. To calculate the mean, first multiply the
value of each response by the number of responses (6 x 8 = 48; 5 x 12 = 60; 4 x 16 = 64; 3 x 14 = 42; 2 x
9 = 18; 1 x 6 = 6). Then, add the totals (48 + 60 + 64 + 42 + 18 + 6 = 238), and tabulate the total number
of responses (8 + 12 + 16 + 14 + 9 + 6 = 65). Divide the total by the number of responses to determine
the mean (238 ÷ 65 = 3.66 or 3.7).
SOURCE: IM:191
SOURCE: Hair, J.F., Jr., Bush, R.P., & Ortinau, D.J. (2000). Marketing research: A practical approach
for the new millennium (p. 526). Boston: Irwin/McGraw-Hill.
42. B
Tactic. A tactic is a specific action for carrying out a strategy. A goal is something a business wants to
attain, such as an increase in sales of high-priced products. A strategy is a plan of action for achieving a
goal, such as increasing the motivation of sales staff. A quota is a specific goal to be met.
SOURCE: IM:194
SOURCE: IM LAP 7—Pick the Mix
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
18
43. A
Measurement systems and electric voltage standards. Retail chains should consider even the most basic
technologies. A chain cannot assume that the same technology that is available in its home country is
available or used in other countries. The location of the country and the companies currently doing
business there are not technological factors. The presence of plastics and metal-producing factories is
important to only certain types of businesses.
SOURCE: IM:195
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p. 110].
Woodland Hills, CA: Glencoe/McGraw-Hill.
44. D
Be willing to buy the product. When customers buy a product, they must first have the need or desire, the
resources, and the willingness to buy the product. Locating the product in a store, learning about its
features—and even making sure that it is on sale—can produce a pleasant purchase experience, but
they are not requirements for buying a product.
SOURCE: IM:196
SOURCE: IM LAP 9—Have We Met?
45. D
Promotional activities. A marketing plan is a set of procedures or strategies for attracting the target
customer to a department store. An important part of a marketing plan is the promotional activities that a
store will use to inform, persuade, or remind customers of its products. Stores need to identify these
activities which may include advertising, sales promotion, personal selling, and publicity. Human
resources are the people who work to produce goods or services. Purchasing policies are guidelines that
direct purchasing decisions. An operating system involves the activities needed to run the store on a dayto-day basis.
SOURCE: IM:197
SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p. 650].
Woodland Hills, CA: Glencoe/McGraw-Hill.
46. B
Industry experts. Qualitative methods of forecasting sales are based on expert opinion. A business may
prepare its sales forecast by asking the opinions of experienced sales representatives, marketing
consultants, distributors, or executives. These individuals are informed about current market and industry
trends and the activities of competitors. Quantitative methods of forecasting sales use customer surveys,
market research, and economic trends as sources of information.
SOURCE: IM:003
SOURCE: IM LAP 3—Nature of Sales Forecasts
47. A
Reach more customers to increase sales by 20%. The objectives in a marketing plan are intended to lead
to sales and an increase in revenue. Reaching more customers is a realistic way of achieving the
objective of increasing sales by 20%. If a furniture store increases sales by 20%, it will probably increase
revenue also. Increasing prices by 50% across the board will probably have the effect of driving away
customers who feel the new prices are excessive. Stores that decrease the salaries of all employees by
10% would affect operating expenses rather than revenue. Imposing a 5% surcharge on customers who
pay on credit will probably reduce sales and revenues.
SOURCE: IM:198
SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 41-42].
Mason, OH: Thomson/South-Western.
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
19
48. A
Marketing plan. A marketing plan is a set of procedures or strategies for attracting the target customer to
a toy store. One way to determine if a marketing plan is effective is to analyze whether the store is
making an acceptable profit on the sale of its products. In some cases, stores invest a lot of time and
money in marketing products but realize very little profit. If a store decides that the profit level is low, it
might reduce its marketing activities or identify other types of marketing activities that are less costly to
implement. The accounting department is a special department responsible for the store's accounting
records. Capital resources are the money, machinery, equipment, and supplies used in production.
Inventory level is the amount of goods on hand.
SOURCE: IM:145
SOURCE: Kotler, P. (2000). Marketing management (10th ed.) [pp. 701-702]. Upper Saddle River, NJ:
Prentice Hall.
49. B
Interdependent. People who depend upon one another are interdependent, rather than independent.
They may or may not be dependable, or reliable. They would not be interrelated, or related to each other.
SOURCE: IS:003
SOURCE: HR LAP 9—Positive Working Relationships
50. B
Locate an employee who can assist the customer. The discount store salesperson should not attempt to
answer questions about an unfamiliar department, but s/he should find someone who can help the
customer. Telling the customer where to find assistance or why s/he can't answer the question would not
adequately meet the customer's needs.
SOURCE: IS:007
SOURCE: Rokes, B. (2000). Customer service: Business 2000 (pp. 108-109). Mason, OH: SouthWestern.
51. A
Image. Employees are the first contact customers have with a bookstore, and the impression they make
affects the customers' image of the bookstore. Bookstores have policies that explain how employees are
to act and how they are to deal with customers in order to present a good image. Credit is the ability to
obtain products based on a promise to pay later. Capital is the assets of a bookstore. Inventory is all the
stock that a bookstore has on hand.
SOURCE: IS:014
SOURCE: HR LAP 25—Interpreting Business Policies
52. A
Search their personal residence. Employers may not search employees' personal residences but may
monitor many employee activities that occur at the workplace including reading e-mail, listening to
telephone conversations, and observing employees in company-owned areas such as the cafeteria.
SOURCE: MN:154
SOURCE: Coulter, M., & Robbins, S. (1996). Management (5th ed.) [p. 671]. Upper Saddle River, NJ:
Prentice Hall.
53. D
Jim works 7:00 a.m. to 3:00 p.m. Flexible schedules give discount store employees various options in the
times they work each day but usually require them to be on the job during certain core hours. In this
case, employees are required to be on the job from 10:00 a.m. to 2:00 p.m. but have a choice as to when
to schedule the remaining four hours. Jim has chosen to work from 7:00 a.m. to 3:00 p.m. which includes
the core hours between 10:00 and 2:00. The other employees are working flexible 40-hour weeks, but
they are not scheduling themselves to be on the job during the entire four-hour core period.
SOURCE: MN:044
SOURCE: DuBrin, A.J. (2003). Essentials of management (6th ed.) [pp. 209-211]. Mason, OH: SouthWestern.
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
20
54. B
Benefit. Benefits, or fringe benefits, are nonmonetary payments that employees receive in addition to
wages such as employee discounts, health insurance, and child-care facilities. A transfer moves an
employee to another position within the company. An employee manual states company policy. A house
organ is a newspaper or magazine that contains articles of interest to all company personnel.
SOURCE: MN:027
SOURCE: Dessler, G. (2000). Human resource management (8th ed.) [pp. 476-477]. Upper Saddle
River, NJ: Prentice Hall.
55. D
Estimated turnover. Department stores plan for future hiring needs in order to have enough employees
on hand to fill available positions. One consideration when identifying future hiring needs is estimated
employee turnover as a result of resignations, retirements, terminations, etc. For example, if a store
knows that five department managers will be retiring within the coming year, it will be able to plan to hire
replacements. Once stores have identified future hiring needs, they can begin the recruitment, selection,
and interview processes.
SOURCE: MN:734
SOURCE: Dessler, G. (2000). Human resource management (8th ed.) [pp. 124-125]. Upper Saddle
River, NJ: Prentice Hall.
56. C
Application. A job application form contains questions about the applicant and his/her education and work
experience. Letters of inquiry or application are sent by individuals seeking jobs to businesses that might
need workers. A résumé is an individual's personal information sheet usually submitted with a letter of
application.
SOURCE: MN:018
SOURCE: MN LAP 51—Selecting New Employees
57. B
Determine the employee's attitudes and feelings about the retailer. Exit interviews are used by retailers to
learn about the views of employees who are leaving the organization. It is a learning process that can
assist a retailer in making changes that will help the retailer operate more effectively in the future.
Conducting exit interviews does not help to shield the retailer from future legal action. At the time of the
exit interview the employee has already made the decision to leave, and the interviewer should not try to
change the employee's mind. The employee's wage at the time of departure does not assist the retailer in
making changes.
SOURCE: MN:133
SOURCE: Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.)
[p. 640]. Cincinnati: South-Western.
58. B
Job analysis. A job analysis identifying specific job responsibilities is a management tool used for
selection of candidates, training, and departmental evaluation. Managers use job analysis to set specific
objectives for the training and development program. Job rotation is an instructional method in which
trainees are rotated periodically from one job to another in order to broaden the trainees' perspective of
the hardware store chain. Job-knowledge skills are a specialized body of information or knowledge that
enable supervisors and managers to do their particular jobs. Implementation is the process of doing or
taking action.
SOURCE: MN:024
SOURCE: MN LAP 50—Manager/Supervisor Training
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
21
59. B
Attract and to retain talented workers. A home improvement store with a reputation for treating its
employees fairly is much more likely to get and to keep good workers. This benefit of managing diversity
will be especially important if predictions for the continued shrinking of the labor pool of educated/skilled
workers are accurate. Stores that manage diversity well have a diverse workforce rather than a
homogeneous workforce. Managing a diverse workforce is more difficult and takes more of managers'
time than managing a homogeneous workforce. A store would not want to reduce its levels of
productivity.
SOURCE: MN:084
SOURCE: MN LAP 55—Managing Diversity in the Workplace
60. D
17%. Gift shops often calculate profitability based on the relationship between net profit and net sales in
order to determine if they are earning an acceptable return on their investment. One formula for
calculating the profitability ratio is net profit divided by net sales ($150,000 ÷ $875,000 = .171 or 17%).
Shops track this ratio from year to year in order to determine if profits are increasing or decreasing in
proportion to sales. If sales increase but the profitability ratio decreases, the shop knows that it is
spending too much on the sales effort and may need to reduce costs or increase prices.
SOURCE: MN:161
SOURCE: Cunningham, B.M., Nikolai, L.A., & Bazley, J.D. (2000). Accounting: Information for business
decisions (pp. 180-181). Orlando, FL: Harcourt.
61. C
2%. Music stores compare their operating results from year to year to determine if their net profit is
increasing, decreasing, or staying the same. In this example, first calculate last year's percent of net
profit based on sales by dividing the amount of net profit by total sales ($35,500 ÷ $270,000 = 0.131 or
13%). Then, calculate this year's percent of net profit based on sales ($50,000 ÷ $330,000 = 0.151 or
15%).To determine the percent of increase from last year to this year, subtract last year's percent from
this year's percent (15% - 13% = 2%).
SOURCE: MN:069
SOURCE: Edward Lowe Foundation. (n.d.). How to analyze your business using financial ratios.
Retrieved November 4, 2005, from
http://edwardlowe.org/index.peer?page=main&storyid=6335
62. C
Organized work area. An unorganized work area often causes a lot of time to be wasted on the job.
Employees who have cluttered desks often have trouble finding what they need and spend time looking
for materials. Employees can make the best use of their time by keeping their work areas organized and
arranged so that everything they need is within easy reach. Employees are entitled to a certain amount of
time for a daily lunch break. Communication should not be limited but should be sufficient to meet the
needs of the employees doing the work. Strict supervision does not necessarily promote the best use of
time.
SOURCE: PD:019
SOURCE: OP LAP 1—About Time
63. A
Careers in retailing are so varied that you can work anywhere you desire in virtually any specific job role.
A key point to be made regarding retailing is the diversity of jobs and the availability of work in any
location. Individuals seeking work in retailing should be able to obtain employment regardless of where
they live. Retailing careers do not limit one to specific locations, and the career ladder is not just from
store to store. Retailing is not limited to stores or warehouses. Retailing, providing products to ultimate
consumers, can take place with or without stores.
SOURCE: PD:038
SOURCE: Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.)
[pp. 4-6]. Upper Saddle River, NJ: Prentice Hall.
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
22
64. A
Selling place. Pricing affects place decisions such as where the goods will be sold. Goods with high
prices will be carried by stores that sell higher priced items. Inexpensive items will be sold at a different
type of store. Balance sheet is a statement showing the financial status of the business. Economic state
is the condition of the economy at any given time. Fiscal policy is the government policy that sets levels
of government spending and taxation.
SOURCE: PI:001
SOURCE: PI LAP 2—Pricing
65. A
Unethical and legal. Shortages of supply when demand is high often generates high prices. Most
countries have laws forbidding price gouging for life-saving products after a tragedy. The laws do not
extend to products that are not life-saving, even if they are in great demand and have no substitutes.
Lumber is not a life-saving product; therefore, it is legal to charge premium prices. However, it is
unethical to do so because a supplier is making a huge profit as a result of another person's tragedy.
SOURCE: PI:015
SOURCE: Ferrell, O.C., Fraedrich, J., & Ferrell, L. (2002). Business ethics: Ethical decision making and
cases (5th ed.) [pp. 223-224]. Boston: Houghton Mifflin.
66. D
Offering low-priced goods that are unavailable. Bait-and-switch advertising involves promoting a lowpriced 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. Bait-and-switch
advertising does not involve promoting discounts on large quantity purchases, selling goods at prices that
are below cost, or handling products that are sold on the gray market.
SOURCE: PI:017
SOURCE: Evans, J.R., & Berman, B. (1997). Marketing (7th ed.) [p. 600]. Upper Saddle River, NJ:
Prentice Hall.
67. D
$4.84. Net cost is determined by multiplying the cost per box by the discount ($5.70 x 15% or .15 = $.855
or $.86). This discount is then subtracted from the original price to determine net cost ($5.70 - $.86 =
$4.84).
SOURCE: PI:022
SOURCE: PU LAP 3—Merchandising-Related Discounts
68. C
$16.00. To calculate the new price, first multiply the current price by the percent of markdown converted
to a decimal. Then, subtract the markdown amount from the price ($20.00 x 20% or .20 = $4.00; $20.00 $4.00 = $16.00).
SOURCE: PI:008
SOURCE: Stull, W.A. (1999). Marketing and essential math skills: Teacher's edition (p. 108). Cincinnati:
South-Western Educational.
69. B
Express. An express warranty may be in written form or expressed verbally. An implied warranty is an
unwritten warranty that is understood by the consumer and the seller that the product will perform as
expected. Not enough information is given to determine if the promise covers the entire product (a full
warranty) or specific parts of the product (a limited warranty).
SOURCE: PM:020
SOURCE: PP LAP 4—Warranties and Guarantees
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
23
70. B
It can concentrate its marketing efforts. A specialty store with a narrow product mix offers a limited
number of product lines. An advantage of a narrow product mix is that the store can specialize—
concentrate its efforts on marketing selected product lines—and thereby produce efficiently. A store with
a narrow product mix may or may not have a shallow product mix since a narrow product mix does not
limit the total volume of products produced.
SOURCE: PM:003
SOURCE: PP LAP 3—Product Mix
71. B
Sell products that customers might not otherwise buy. Retailers often bundle products to encourage
customers to buy products that they might not otherwise want to buy. The price of the bundled products
is usually lower than the combined price of the products sold separately. The lower price is an incentive
to buy. An example is a toy store selling a video game player, two video games, and a carrying case for
one price. The all-inclusive price makes the bundle attractive and affordable. Retailers do not bundle
products to offer discounts on products that are selling well or to price unpopular products below cost to
reduce inventory. Retailers use optional-product pricing to promote the sale of expensive accessory
products.
SOURCE: PM:041
SOURCE: Kotler, P., & Armstrong, G. (1997). Marketing: An introduction (4th ed.) [p. 334]. Upper
Saddle River, NJ: Prentice Hall.
72. A
Purchase of over-the-counter drugs. As a general rule, delivery service is provided when the items are
necessary in an emergency such as prescription drugs, but not for everyday, over-the-counter drugs
such as cough syrup, aspirin, or ointments. When purchasing home appliances, such as a washer, dryer,
or refrigerator, customers expect delivery and hook-up in their home. Also, when remodeling or building a
home, the size of the materials will often dictate that delivery to the work site is a necessity. The
purchase of mail-order products requires home delivery because the customers are not able to purchase
the goods in a retail setting.
SOURCE: PM:036
SOURCE: Lewison, D.M. (1997). Retailing (6th ed.) [p. 503]. Upper Saddle River, NJ: Prentice Hall.
73. C
Unique value. Appliance stores often obtain a competitive advantage by finding something unique that
only they can provide that their competitors are unable or unwilling to provide. Many stores sell similar
products that have the same benefits and features; therefore, in order to attract customers, a store might
try to offer something unique. For example, an appliance store might offer the best service, the fastest
delivery, or the most convenience. This unique value gives the store a competitive advantage. A store
does not gain a competitive advantage by providing a like benefit, a matching trait, or a standard image.
SOURCE: PM:042
SOURCE: Evans, J.R., & Berman, B. (1997). Marketing (7th ed.) [pp. 650-651]. Upper Saddle River,
NJ: Prentice Hall.
74. D
Paper goods. A generic item is an unbranded product that is plainly packaged, has lower quality, and
receives little or no promotion. Paper goods are sometimes sold as generic items because some
consumers are willing to accept a lower level of quality in exchange for a lower price. Bicycles, cars, and
sporting goods depend on their brand names to generate sales.
SOURCE: PM:021
SOURCE: PM LAP 6—It's a Brand, Brand, Brand World!
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
24
75. D
Atmosphere. Many think of "atmosphere" as only the surroundings in a retail environment such as the
lighting and displays. Although atmosphere does include these and other tangible factors, such as noise
levels, use of music, etc., other intangible factors have at least as much impact on the atmosphere.
These include a variety of practices and policies that can include credit policies, return policies and
procedures, and the levels of customer service the retailer provides. These factors do not really directly
affect the retailer's promotional approaches, nor its employee/customer ratios. Merchandising is more
directly related to the activities involved in acquiring goods and making them available to customers.
SOURCE: PM:032
SOURCE: Berman, B., & Evans, J.R. (1998). Retail management: A strategic approach (7th ed.)
[p. 132]. Upper Saddle River, NJ: Prentice Hall.
76. D
Avoid selecting a name already in use by another business. When selecting a brand name, a business
should have several of its preliminary choices researched legally. Not only will this help the business
ultimately protect its chosen name, but it will also help to avoid selecting—and becoming attached to—
names that other businesses may already legally own. Legally researching names will not help avoid
names that are unpleasant, nor will it help to stimulate consumers' buying habits. Other types of
qualitative, consumer-based, and secondary research can help a business learn these things about
potential brand names. The same holds true for determining if a name is adaptable to displays, signage,
and advertising.
SOURCE: PM:126
SOURCE: PM LAP 10—Building Your Business's Brand
77. B
Merchandising plan. In order for a retailer to be successful, it must offer goods that meet its customers'
needs and support its image. A merchandising plan defines the market the retailer wants to serve, the
kinds of products it plans to carry, and the image it wants to create. These goals provide guidelines for
the merchandise budget. Merchandise classifications are the categories into which products are divided,
e.g., color or style. Past sales records show what the retailer has sold in the past. Perpetual inventory
records are an ongoing record of all inventory transactions.
SOURCE: PM:061
SOURCE: Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.)
[pp. 350-353]. Upper Saddle River, NJ: Prentice Hall.
78. D
$8,000. Open-to-buy is the amount of money a drugstore has available for the purchase of stock during a
specific time period. When planned purchases are known, open-to-buy can be found by subtracting the
stock on order from planned purchases ($13,000 - $5,000 = $8,000). The drugstore must determine
open-to-buy in order to plan further purchases.
SOURCE: PM:064
SOURCE: Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.)
[pp. 402-404]. Upper Saddle River, NJ: Prentice Hall.
79. C
Daily News Record. The Daily News Record is a trade publication for the men's apparel, retail, and textile
industries. Trade publications are useful to buyers in a certain occupational or industry group because
they provide current information about new products and trends. Business Week is a news magazine that
also reports on the economy. USA Today and the Wall Street Journal are newspapers.
SOURCE: PM:120
SOURCE: Wolfe, M.G. (1998). The world of fashion merchandising (p. 70). Chicago: GoodheartWillcox.
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
25
80. C
Merchandising. The merchandising budget helps the retailer to purchase enough stock to meet
customers' needs without tying up too much capital in stock. An advertising budget sets limits for
promotional expenditures; a cash budget estimates a firm's income and expenses; and a capital budget
helps the retailer plan major purchases.
SOURCE: PM:067
SOURCE: Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.)
[pp. 395-397]. Cincinnati: South-Western.
81. A
Provides jobs. Promotion benefits the economy by providing many job opportunities. There are more than
10 million people employed in the field of promotion. Promotion also encourages demand for a product
which in turn helps to create a need for mass production. The need to produce a product in the desired
quantity increases the number of jobs required for production. Creating images and building confidence
are ways that promotion benefits businesses. Offering information benefits consumers.
SOURCE: PR:001
SOURCE: PR LAP 2—Promotion
82. A
Publicity. Publicity is any nonpersonal presentation of ideas, goods, or services that is not paid for by the
company or individual that benefits from it. The newspaper article provided information about Harrison
Electronics to a wide audience, but the business did not have to pay for the exposure. Promotion is the
marketing element referring to the various types of communications that marketers use to inform,
persuade, or remind customers of their products. Public relations is a type of institutional promotion
created to deal with controversial public issues that are related to a company or its products. Product mix
is the particular assortment of products that a business offers in order to meet its market's needs and its
company's goals.
SOURCE: PR:003
SOURCE: PR LAP 1—Promotional Mix
83. D
Value misrepresentation. Value misrepresentation is unethical behavior because the advertiser is not
being honest about the cost or value of the prize. For example, a department store provides a television
set as a prize for a contest. The store claims that the television is worth $500 but actually retails for $300
at an electronics store. Price discrimination occurs when businesses sell similar products to similar
customers at different prices. Benefit exploitation is not a common term used to describe advertising
practices, however, the term might be considered similar in meaning to puffery. Puffery is a tactic used by
advertisers that exaggerates the positive attributes of a product. Cost fixation is not a term commonly
used to describe advertising practices and should not be confused with price fixing.
SOURCE: PR:099
SOURCE: Semenik, R.J. (2002). Promotion and integrated marketing communications (pp. 210-211).
Mason, OH: South-Western.
84. D
Feature. This type of copy gives factual information about the product. The photocopier ad might discuss
such features as the ability to copy in color or to collate. Claim copy is a statement that must be proven
by the advertiser. Endorsement copy cites a reputable outside source to strengthen the sales message.
Benefit copy focuses on benefits of the product to the consumer.
SOURCE: PR:014
SOURCE: PR LAP 7—Parts of Print Ads
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
26
85. C
They are uncomfortable with advertisers having personal information about them in their computers and
are unsure how it got there. Targeting should benefit consumers as well as advertisers. Advertisers can
use consumer information to communicate with them selectively about things that interest them.
However, advertisers have acquired more and more information of an increasingly personal nature and
now routinely sell their databases to other advertisers. The result is that a vast amount of consumer
information is widely available to just about anyone, and this makes consumers extremely uncomfortable
and less willing to share any information at all. Consumers feel that advertisers have too much of every
kind of information—much more than they need to market their products successfully—and are not
looking for ways to streamline the acquisition of information or its accuracy. Many consumers don't like
being put into a particular group or labeled in any way.
SOURCE: PR:091
SOURCE: Wells, W., Burnett, J., & Moriarty, S. (2003). Advertising principles and practice (6th ed.)
[p. 421]. Upper Saddle River, NJ: Prentice Hall.
86. D
Stimulate demand and increase sales. Businesses use visual merchandising to attract customers and
interest them in purchasing. It is not intended to provide guidance. Publicity is any nonpersonal
presentation of ideas, goods, or services that is not paid for by the company or individual which receives
it. Public relations is enhanced by institutional promotions created to deal with controversial public issues
that are related to a company or its products.
SOURCE: PR:023
SOURCE: Diamond, J., & Diamond, E. (1999). Contemporary visual merchandising (pp. 1-3). Upper
Saddle River, NJ: Prentice Hall.
87. C
To keep the goods salable. Businesses generally intend to sell the merchandise used in displays. This
merchandise is returned to the department from which it came once it is removed from the displays.
Display workers should handle the merchandise carefully so that it will be salable and can be returned in
good condition. Not all display merchandise is cleaned before it is returned to the sales floor. Careful
handling of merchandise does not shorten dismantling time. Merchandise is used in only one display.
SOURCE: PR:054
SOURCE: Diamond, J., & Diamond, E. (1999). Contemporary visual merchandising (pp. 225-226).
Upper Saddle River, NJ: Prentice Hall.
88. C
Silent salespeople. Signs should contain brief, basic information in an easy-to-read format. This enables
customers to choose products without the assistance of a salesperson. Fixtures are items that are
securely attached to the interior of a building such as counters, display cases, and racks. A sign might
mention that a product carries a warranty, but the sign itself is not a warranty. Shelf extenders extend the
display area of conventional shelving.
SOURCE: PR:109
SOURCE: Colborne, R. (1996). Visual merchandising: The business of merchandise presentation
(p. 234). Albany, NY: Delmar.
89. C
Evaluating the results of the plan. After the business has set the objectives for its promotional plan,
decided how much money it can afford to spend, and selected the appropriate elements of the
promotional mix to use in presenting its message, the business should evaluate the results. In other
words, promotional planning is an ongoing process. Planners should monitor the plan and be prepared to
make changes in it if it is not achieving the desired results.
SOURCE: PR:073
SOURCE: Burrow, J., (2002). Marketing (pp. 418-421). South-Western.
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
27
90. C
Create desire for goods and services. Salespeople can create desire for new or established products by
informing customers, showing them products, and explaining how the products could benefit them. Other
roles of selling include keeping the economy moving, promoting competition, affecting employment, and
adding utility to products. The competition among sellers helps to control prices of products.
SOURCE: SE:017
SOURCE: SE LAP 117—Selling
91. D
Showing appreciation. One way that salespeople for furniture manufacturers can build relationships with
customers is to show their appreciation to customers for their business. Without customers, salespeople
would not have jobs and companies would not survive. Therefore, it is important to let customers know
how important they are and that they are appreciated. To do this, salespeople often send thank-you
cards, additional information that may be useful, congratulatory notes if customers have received awards,
etc. The purpose is to let customers know that salespeople are thinking of them and value their business.
Entertaining may be appropriate occasionally but not regularly. Salespeople should call when necessary
rather than daily unless there is an important project or issue to discuss. Customers usually evaluate the
performance of salespeople instead of salespeople evaluating the performance of customers.
SOURCE: SE:076
SOURCE: Futrell, C.M. (1999). Fundamentals of selling: Customers for life (6th ed.) [pp. 409-410].
Boston: Irwin/McGraw-Hill.
92. D
Word-of-mouth advertising. George was satisfied with his experience at the record store. As a result, he
told Brent about the sale which encouraged Brent to also buy a CD. Satisfied customers often provide the
best promotion and publicity for a business by spreading the word about the company. Repeat sales
refers to a customer purchasing from a store again and again. Personal satisfaction refers to the feeling
that a salesperson may experience from providing service to a customer. Referrals refers to the act of
loyal customers providing a salesperson with leads for locating and accessing new clients.
SOURCE: SE:828
SOURCE: SE LAP 115—Building Clientele
93. C
Develop a control system. Sales managers for toy manufacturers have a responsibility to create an
ethical environment in the business that encourages salespeople to be ethical in their dealings with
customers. One way to make sure salespeople are behaving ethically is to develop a control system that
monitors their actions. For example, a system that checks expense reports or examines orders received
as a result of low bids will encourage salespeople to follow established procedures. A business that sets
standards and monitors those standards usually is a business that has ethical salespeople. Lowering the
sales objectives and hiring entry-level employees will not encourage salespeople to be ethical unless the
business develops and enforces ethical standards. Creating a legal department will not ensure that
salespeople behave ethically.
SOURCE: SE:106
SOURCE: Futrell, C.M. (2001). Sales management: Teamwork, leadership, and technology (6th ed.)
[pp. 40-41]. Mason, OH: South-Western.
94. C
Quickly analyzes numerical data. Computer technology has made it possible to develop a variety of
software programs. For example, spreadsheet software programs are used to organize and calculate
numerical information. Spreadsheet programs can be used in sales to track and evaluate sales volume
and sales dollars. By using spreadsheet programs, businesses can monitor sales and quickly determine
if salespeople are achieving goals. Word-processing software might be used to create sales contracts
and generate purchase orders. Spreadsheet software programs are not able to identify potential
customers but are able to analyze sales figures of existing customers.
SOURCE: SE:107
SOURCE: Futrell, C.M. (2001). Sales management: Teamwork, leadership, and technology (6th ed.)
[pp. 110-111]. Mason, OH: South-Western.
Test 860
RETAIL MERCHANDISING (MANAGEMENT LEVEL) — KEY
28
95. B
Customers. Customers are people who purchase goods and services from another entity. Governments
at all levels can develop laws to protect the general public from unsavory selling practices. For example,
some countries employ selling regulations to help protect customers from selling activities involving price
discrimination. Governments generally do not establish selling laws to protect general relationships,
products, and objectives.
SOURCE: SE:108
SOURCE: Futrell, C.M. (2001). Sales management: Teamwork, leadership, and technology (6th ed.)
[p. 39]. Mason, OH: South-Western.
96. A
Convince the customer of the product's benefits. The sales talk should translate product features into
product benefits that will meet the customer's specific needs. Customers make purchases based upon
the benefits they will receive from products. The sales talk should include more than a minimum amount
of product information. The salesperson should be interested in satisfying the customer rather than in
demonstrating his/her skills or closing the sale as quickly as possible.
SOURCE: SE:048
SOURCE: SE LAP 126—The Selling Process
97. C
Increase sales. Asking questions helps department store salespeople to satisfy customers' needs more
completely by identifying goods or services best suited to their needs. Questioning also enables
salespeople to identify additional items that customers may need and to increase their sales by
suggesting these items to customers. Explaining the features and promoting the benefits of goods and
services are normal parts of the selling process that do not necessarily involve questioning. The purpose
of questioning is to obtain information rather than give information.
SOURCE: SE:111
SOURCE: SE LAP 114—Questioning
98. C
Cashier's. Cashier's checks are often used when the financial institution needs to pay out a large amount
of money. A certified check is a personal or business check charged to the customer and guaranteed by
the bank. Preprinted checks in set amounts are sold to individuals as traveler's checks. Government
checks are issued by federal or state government officials.
SOURCE: SE:152
SOURCE: German-Grapes, J. (1997). The teller's handbook: Everything a teller needs to know to
succeed (pp. 156-157). New York: McGraw-Hill.
99. A
$1.32. To calculate unit prices, divide the multiple price by the number of items in the group. In this case,
the multiple price is $3.95, and the number of items in the group is three. Therefore, $3.95 ÷ 3 = $1.316,
which is rounded to $1.32.
SOURCE: SE:117
SOURCE: MA LAP 48—Completing Sales Checks
100. A
$1,413,037.50. Hardware store chains analyze territory sales reports to determine if the territories are
meeting or exceeding quota. If territories are not selling as much as expected, a chain might review the
sales procedures and decide to make changes to improve performance. On the other hand, territories
that exceed quota might be rewarded with bonuses or other types of compensation. In this example,
Territory C exceeded quota by 5%. To determine that amount, multiply the quota by the 5% and add that
figure to the original quota ($1,345,750 x 5% or .05 = $67,287.50; $1,345,750.00 + $67,287.50 =
$1,413,037.50).
SOURCE: SE:056
SOURCE: Churchill, G.A., Ford, N.M., Walker, O.C., Johnston, M.W., & Tanner, J.F. (2000). Sales force
management (6th ed.) [pp. 520-524]. Boston: Irwin/McGraw-Hill.