MKTG 3348 FINAL EXAM REVIEW

Which of the following is not an advantage of an operations blueprint?

A) The operations blueprint standardizes activities.

B) The operations blueprint helps evaluate personnel needs.

C) The operations blueprint determines space needs.

D) The operations blueprint isolates weak or failure-prone operations components.

C) The operations blueprint determines space needs.

Which of these is not a benefit of using prototype stores?

A) The stores use custom buildings for each city and town.

B) The stores enable a retailer to take advantage of quantity discounts for fixtures and other materials.

C) The stores ease the employee interchange among branches.

D) The stores help portray a consistent image among franchise and chain store units.

A) The stores use custom buildings for each city and town.

A characteristic of rationalized retailing programs is the ________.

A) encouragement of manufacturers to finance inventories

B) use of low-cost rental locations

C) use of used equipment and fixtures

D) high degree of centralized management control

D) high degree of centralized management control

Rigid control and standardization for each phase of business characterize ________.

A) mass merchandising

B) rationalized retailing

C) positioned retailing

D) risk-minimization retailing

B) rationalized retailing

The need for store personnel in a season, week, day, and time period is ascertained through ________.

A) job standardization

B) workload forecasts

C) cross-training

D) time-based performance adjustments

B) workload forecasts

The use of in-store displays and the sale of well-known national brands can effectively reduce selling costs through use of ________.

A) self-service facilities

B) just-in-time (JIT) inventory management

C) vertical merchandising

D) prototype stores

A) self-service facilities

Supermarkets and full-line discount stores have effectively reduced personnel costs through the use of ________.

A) self-service facilities

B) prototype stores

C) vertical merchandising

D) just-in-time inventory management

A) self-service facilities

Which statement about energy management is not correct?

A) A retailer can reduce energy costs through adjusting a store's interior temperatures during nonselling hours.

B) The substitution of traditional bulbs with high-energy bulbs and fluorescent ballasts can significantly reduce energy costs for lighting.

C) The potential savings to a retailer with an effective energy management program are quite low.

D) Computerized systems with centralized controls that enable a retailer to control lighting, heat, and air-conditioning in each store from a single office can reduce heating, air-conditioning, and ventilating costs.

C) The potential savings to a retailer with an effective energy management program are quite low.

Ordering costs, holding costs, and loss in profits due to stockouts are effectively controlled in ________.

A) prototype stores

B) incremental budgeting

C) zero-based budgeting

D) inventory management

D) inventory management

Store security relates to two issues: ________ and ________.

A) inventory security; cash security

B) employee security; manager security

C) personal security; merchandise security

D) employee security; customer security

C) personal security; merchandise security

Credit-card fees paid by retailers average from ________ percent to ________ percent of sales.

A) 1.5; 5

B) 2.5; 3.5

C) 3.5; 5

D) 5; 6

A) 1.5; 5

In a debit-card system, the ________.

A) retailer still has the risk of customer nonpayment

B) purchase price is immediately deducted from a consumer's bank account and then entered into the retailer's account

C) customer can either pay the full amount due immediately or defer payment

D) customer is not billed until his or her billing cycle date

B) purchase price is immediately deducted from a consumer's bank account and then entered into the retailer's account

Which statement concerning computerized checkouts is not correct?

A) Computerized checkouts instantly record and display sales.

B) Computerized checkouts cannot store inventory data.

C) Computerized checkouts can reduce transaction time.

D) Computerized checkouts can reduce the need for item pricing.

B) Computerized checkouts cannot store inventory data.

Which system increases employee productivity for supermarkets?

A) debit-card system

B) self-scanning

C) outsourcing

D) data-base management

B) self-scanning

A Web-based retailer has decided to have a logistics firm handle packing, handling, and shipping responsibilities. This illustrates ________.

A) outsourcing

B) benchmarking

C) re-engineering

D) scenario analysis

A) outsourcing

Contingency plans are an important component of ________.

A) operations management

B) crisis management

C) control activities

D) feedback

B) crisis management

A listing and sequencing of interrelated tasks that must be performed by several retail personnel to assure that a retail service is efficiently and effectively performed is an important part of a(n) ________.

A) operations blueprint

B) workload forecast

C) job standardization analysis

D) cross-training analysis

A) operations blueprint

The standardization of retail operations is often associated with the use of ________.

A) participatory management

B) unionization by employees

C) decentralized decision making

D) prototype stores

D) prototype stores

A major difficulty with the use of prototype stores is the ________.

A) inconsistent store image

B) higher purchase costs for fixtures

C) inflexibility in dealing with special site characteristics

D) difficulty in applying standardized operating cost controls to different locations

C) inflexibility in dealing with special site characteristics

A major advantage to the use of rationalized retailing programs is the ________.

A) low investment

B) ease of expanding the number of retail facilities

C) appeal to a well-defined market target

D) spreading of risk due to diversification

B) ease of expanding the number of retail facilities

A significant disadvantage to the use of rationalized retailing is the ________.

A) high operating costs associated with standardization

B) poor possible fit with consumer preferences in all geographic markets

C) loss of quantity discounts through volume purchasing

D) need for more personnel due to decentralized decisions

B) poor possible fit with consumer preferences in all geographic markets

A characteristic associated with the bottom-up space management approach is ________.

A) retail space costs may be high

B) the total space available may be less than that required by the plan

C) planning is centralized

D) that the needs of scrambled merchandising may not be met

B) the total space available may be less than that required by the plan

A retailer with high seasonality can best reduce its labor costs in the peak season through ________.

A) job standardization

B) carefully screening employees

C) developing employee performance standards

D) cross-training and developing self-service options for consumers

D) cross-training and developing self-service options for consumer

The most appropriate financial performance standard for a department store retail buyer is ________.

A) customer satisfaction

B) total unit sales

C) total dollar gross profit in a department

D) total dollar sales

C) total dollar gross profit in a department

A retailer can encourage long-term employment by ________.

A) using job standardization

B) utilizing self-service facilities

C) adhering to a promotion-from-within philosophy

D) developing clear employee performance standards

C) adhering to a promotion-from-within philosophy

A retailer is concerned about such issues as trade-offs between faster delivery times from suppliers and higher shipping costs and support from suppliers in storing merchandise. These issues concern ________.

A) store security

B) inventory management

C) crisis management

D) outsourcing

B) inventory management

A retailer selling products that are potentially dangerous due to misuse or manufacturer defects should get ________ insurance.

A) property damage

B) public liability

C) product liability

D) workers' compensation

C) product liability

A retailer can reduce its bad debt on credit sales to zero by ________.

A) using third-party credit plans and debit cards

B) developing and implementing a systematic credit authorization plan

C) developing high fees for nonpayment

D) limiting credit sales to the best credit risks

A) using third-party credit plans and debit cards

Security and privacy issues are greatest among ________.

A) debit card systems

B) credit card systems

C) retailer-based credit cards

D) bank-based credit cards

D) bank-based credit cards

The major difference between computerized checkouts and electronic point-of-sale systems is that electronic point-of-sale systems ________.

A) are not tied into the retailer's main computer

B) do not have the capacity to print complex reports

C) are not compatible with UPC scanners

D) also verify, monitor, and change prices, as well as provide sales reports

D) also verify, monitor, and change prices, as well as provide sales reports

All of the activities involved in acquiring particular goods and/or services and making them available at the places, times, prices, and quantities that will enable the firm to reach its goals comprise ________.

A) merchandising

B) financial merchandise management

C) retail pricing

D) a centralized buying organization

A) merchandising

Which retail merchandising strategy reflects the need to appeal to specific target markets through different product offerings?

A) rationalized retailing

B) micromerchandising

C) battle of the brands

D) cross selling

B) micromerchandising

Which merchandising strategy is similar to scrambled merchandising?

A) cross-merchandising

B) micromerchandising

C) cross selling

D) rationalized retailing

A) cross-merchandisin

A formal buying organization is characterized by ________.

A) the same personnel handling merchandising and other retail functions

B) low organizational costs

C) the merchandising function being a separate department

D) flexibility in organizational design

C) the merchandising function being a separate department

A major advantage of centralized buying for a retailer is ________.

A) the increased role of branch stores

B) greater fit with regional trends

C) faster delivery times

D) greater bargaining power

D) greater bargaining power

A major disadvantage of decentralized buying is ________.

A) excessive uniformity

B) poor morale at local stores

C) inflexibility in decision making

D) an inconsistent image

D) an inconsistent image

Which buying organization operates close to the sources of supply?

A) inside buying office

B) outside buying office

C) general buying office

D) resident buying office

D) resident buying office

Which buying organization seeks to receive quantity discounts and bargaining power discounts for its members so that they will be better able to compete against larger chain organizations?

A) cooperative buying

B) inside buying organization

C) resident buying office

D) formal buying organization

A) cooperative buying

A major disadvantage of a merchandising philosophy is that ________.

A) responsibility for success or failure may be unclear

B) functions are combined into one position that require different abilities

C) reporting responsibilities may be unclear

D) coordination of buying and selling may be reduced

B) functions are combined into one position that require different abilities

A never-out list is used for ________.

A) fashion items

B) dealer brands

C) fad items

D) best sellers

D) best sellers

A good or service will be supplied in one basic version in which stage of the product life cycle?

A) introduction

B) growth

C) maturity

D) decline

A) introduction

The target market expands to include middle-income consumers who are somewhat more innovative than the average consumer in which product life cycle stage?

A) introduction

B) growth

C) maturity

D) decline

B) growth

A retailer primarily appeals to the lowest income consumers and laggards in which stage of the product life cycle?

A) introduction

B) growth

C) maturity

D) decline

D) decline

Which fashion theory assumes that a fashion passes from the upper to the lower social classes?

A) vertical trend theory

B) horizontal trend theory

C) diffusion of innovation theory

D) fashion emulation theory

A) vertical trend theory

A common advantage of scrambled merchandising is that ________.

A) the scrambled goods have high profit margins

B) opportunities for cross-selling decrease

C) customers can be traded-up to more costly goods

D) the sale of substitute goods increases

A) the scrambled goods have high profit margins

________ brands are somewhat pre-sold to consumers, require limited retailer investment in marketing, and often represent maximum quality to consumers.

A) Manufacturer (national)

B) Private (dealer)

C) Generic

D) Wholesaler

A) Manufacturer (national)

Increased competition for shelf space among manufacturer, dealer, and generic brands is commonly referred to as ________.

A) channel cooperation

B) the battle of the brands

C) channel conflict

D) slotting allowances

B) the battle of the brands

Direct product profitability equals an item's ________.

A) annual sales divided by the total linear footage devoted to a product category

B) gross profit less its direct retailing costs (but not including general overhead)

C) annual gross profit divided by the total linear footage devoted to the item

D) number of days of supply on the shelf

B) gross profit less its direct retailing costs (but not including general overhead)

Decentralized buying is often associated with ________.

A) category management

B) micromerchandising

C) risk-minimization retailing

D) electronic data interchange (EDI)

B) micromerchandising

A chain retailer with a national representation can optimize its use of national advertising media through use of a(n) ________.

A) informal buying organization

B) resident buying office

C) decentralized buying organization

D) centralized buying organization

D) centralized buying organization

Which buying organization format for department stores is centralized?

A) main store control

B) equal store

C) separate store

D) diversified retailer

A) main store control

Small retailers seeking to match the same bargaining power as major chains should seek to utilize ________.

A) an inside buying organization

B) a decentralized buying organization

C) resident buying offices

D) cooperative buying

D) cooperative buying

A retailer's descriptions of goods to be stocked in its assortment plan are constant over a five-year period. The assortment plan analyzed is a(n) ________.

A) never-out list

B) model stock plan

C) basic stock list

D) extended merchandise assortment plan

C) basic stock list

The use of a perpetual inventory system to monitor inventory levels per unit based on initial inventory levels, purchases, and sales is most common with a ________.

A) never-out list

B) model stock plan

C) basic stock list

D) extended merchandise assortment plan

A) never-out list

The use of explanatory advertising by retailers and limited distribution by manufacturers are characteristics of which product life cycle stage?

A) introduction

B) growth

C) maturity

D) decline

A) introduction

Price competition by retailers is most intense in which product life cycle stage?

A) introduction

B) growth

C) maturity

D) decline

C) maturity

In general, as a retailer moves from a narrow and shallow strategy toward a wide and deep strategy, ________.

A) customer disappointment with selection increases

B) one-stop shopping appeals are lost

C) inventory turnover decreases

D) a specialist image is received

C) inventory turnover decreases

A conventional supermarket's adding a line of gas barbecues and summer furniture during the summer season illustrates which merchandising strategy?

A) scrambled merchandising

B) trading up

C) handling substitute products

D) selling complementary goods

A) scrambled merchandising

The selling of car mats, burglar alarms, and extended warranties by a new car dealer illustrates ________.

A) scrambled merchandising

B) trading up

C) selling substitute goods and services

D) selling complementary goods and services

D) selling complementary goods and services

In category management, a grouping of products is viewed as a ________.

A) boutique

B) strategic business unit

C) functional unit

D) vendor responsibility unit

B) strategic business unit

The sensitivity of consumers to price changes is measured by the ________.

A) law of demand

B) sales to price coefficient

C) coefficient of elasticity

D) price elasticity of demand

D) price elasticity of demand

A relatively small percentage change in the price of a computer results in large percentage changes in the number of units purchased for a retailer. The price elasticity of demand for computers can be described as ________.

A) price elastic

B) unitary elasticity

C) price inelastic

D) low

A) price elastic

Horizontal price fixing involves an agreement ________.

A) to charge retail firms lower prices in areas with an undesirable competitor

B) by any channel member not to sell merchandise below cost

C) among manufacturers, among wholesalers, or among retailers to set prices

D) by retailers to charge the price level suggested by manufacturers or wholesalers

C) among manufacturers, among wholesalers, or among retailers to set prices

The intent of vertical price-fixing legislation was to protect ________.

A) large retail chains

B) small manufacturers

C) small, full-service retailers

D) final consumers

C) small, full-service retailers

Price-discrimination legislation is designed to limit the ability of ________.

A) retailers to charge less than a manufacturer's or wholesaler's suggested list price

B) manufacturers and wholesalers to grant large discounts or favorable terms to large retailers when the discount could not be justified by cost savings

C) manufacturers, wholesalers, and retailers from conspiring to fix retail prices

D) manufacturers from setting artificially low prices with the intent of destroying competition

B) manufacturers and wholesalers to grant large discounts or favorable terms to large retailers when the discount could not be justified by cost savings

In predatory pricing, large retailers attempt to destroy smaller retailers by ________.

A) vertical integration

B) conspiring with manufacturers to refuse to sell to smaller retailers

C) selling goods at very low prices (sometimes even below cost)

D) providing free warranties with selected goods

C) selling goods at very low prices (sometimes even below cost)

Retailers typically use loss leaders to ________.

A) increase store traffic

B) switch customers to other goods with higher profit margins

C) increase their bargaining power with select suppliers

D) practice opportunistic buying

A) increase store traffic

A retailer typically has no intention of selling a promoted good or service in ________.

A) unit pricing

B) item price removal

C) price discrimination

D) bait-and-switch advertising

D) bait-and-switch advertising

Which strategy does not enable a retailer to control retail prices?

A) stocking private brands

B) selling gray market goods

C) selling pre-sold manufacturer brands

D) centralizing purchases with few manufacturers

C) selling pre-sold manufacturer brands

In price guarantees, a manufacturer protects a retailer by ________.

A) indemnifying it for any antitrust action against the firm caused by the manufacturer's illegal action

B) refunding the difference if a retailer must lower its retail price

C) offering to sell its private-label merchandise if required

D) refusing to sell to price-cutting retailers

B) refunding the difference if a retailer must lower its retail price

A retailer able to develop a strongly differentiated retail mix can utilize ________.

A) pricing at the market

B) pricing below the market

C) deregulated market pricing

D) administered pricing

D) administered pricing

Which of the following suggests that too low a price may hinder demand?

A) bait advertising

B) sales-below-cost laws

C) prestige pricing

D) predatory pricing laws

C) prestige pricing

The most widely practiced retail pricing technique is ________.

A) cost-oriented pricing

B) prestige pricing

C) competition-oriented pricing

D) demand-oriented pricing

A) cost-oriented pricing

The difference between initial markups and maintained markups is due to ________.

A) different terms offered to larger customers

B) seasonal discounts

C) markdowns, added markups, shortages, and discounts

D) revisions in planned profits

C) markdowns, added markups, shortages, and discounts

Which pricing strategy seeks to stabilize demand throughout the year?

A) variable pricing

B) everyday low pricing (EDLP)

C) one-price policy

D) flexible pricing

B) everyday low pricing (EDLP)

In which pricing technique does a retailer advertise and sell key items in the product assortment at less than the usual profit margin?

A) price lining

B) leader pricing

C) odd pricing

D) bait-and-switch advertising

B) leader pricing

A retailer sells men's suits for $179, $229, $309, and $359. This illustrates ________.

A) price lining

B) leader pricing

C) odd pricing

D) bait advertising

A) price lining

A major advantage of an early markdown policy is that ________.

A) consumer interest is heightened during storewide clearances

B) merchandise offered for sale is fresh

C) goods can be resold during next season without any need for a price reduction

D) the retailer has greater opportunity to sell the good

B) merchandise offered for sale is fresh

A negatively-sloped demand curve means that ________.

A) the price elasticity of demand is negative

B) demand is elastic

C) demand is inelastic

D) demand is unitary

A) the price elasticity of demand is negative

A key difference between a loss leader and leader pricing is based upon whether ________.

A) the goods are sold above cost

B) bait advertising is used as part of the retailer's strategy

C) sufficient customer traffic is generated

D) competing retailers are hurt by the action

A) the goods are sold above cost

A key difference between loss leaders and bait-and-switch advertising is based upon whether ________.

A) the strategy is legal

B) competitors are hurt by the offer

C) the retailer intends to sell the advertised good or service

D) ample store traffic is created by the strategy

C) the retailer intends to sell the advertised good or service

The key difference between bait-and-switch advertising and "trading the customer up" to a more expensive substitute is that in "trading the customer up," the advertised low-price good ________.

A) is sold below cost

B) is available for sale at the advertised price

C) is disparaged

D) must be specially ordered

B) is available for sale at the advertised price

Selling against the brand and private labels are two strategies retailers use to ________.

A) increase consumer price elasticity

B) create nonprice competition

C) generate price competition

D) assert channel power

D) assert channel power

Administered pricing utilizes ________.

A) nonprice competition

B) price guarantees

C) quantity and seasonal discounts

D) bargaining power

A) nonprice competitio

A market penetration strategy should be used when a retailer ________.

A) believes in the price-quality association

B) seeks to maximize profits

C) seeks to maximize sales

D) seeks to differentiate its offerings through superior customer service

C) seeks to maximize sales

A jewelry store has been offered a special price on estate jewelry. A typical 14-karat pin costs the jeweler $350 and can retail at $595. What markup at retail will the jeweler obtain?

A) 20.0 percent

B) 36.4 percent

C) 41.2 percent

D) 57.1 percent

C) 41.2 percent

The major difference between an initial markup and a maintained markup is that the maintained markup reflects ________.

A) actual (not planned) retail operating expenses

B) planned (not actual) retail operating expenses

C) planned shortages and overages

D) actual prices received and actual shortages

D) actual prices received and actual shortages

Manufacturers seek to reduce extreme shifts in demand due to stocking up by wholesalers, retailers, and final consumers through ________.

A) a one-price policy

B) leader pricing

C) everyday low pricing (EDLP)

D) customary pricing

C) everyday low pricing (EDLP)

Some of the legal difficulties associated with the Robinson-Patman Act can be avoided through use of ________.

A) a one-price policy

B) variable markup pricing

C) the price-quality association

D) customary pricing

A) a one-price policy

An early markdown policy can be assured through the use of a(n) ________.

A) off-retail markdown percentage plan

B) price-adjustment plan

C) stock-shortage control plan

D) automatic markdown plan

D) automatic markdown plan

Any communication by a retailer that informs, persuades, and/or reminds the target market about any aspect of that firm is ________.

A) advertising

B)  public relations

C)  retail promotion

D)  the retail communication channel

C)  retail promotion

The four elements of ________ are advertising, public relations, personal selling, and sales promotion.

A) communication

B)  selling

C)  communication channel

D)  promotion

D)  promotion

Which form of promotion has media payment, a nonpersonal presentation, out-of-store mass media, and an identified sponsor?

A) sales promotion

B)  advertising

C)  public relations

D)  personal selling

B)  advertising

A major difference between the advertising strategies of retailers and manufacturers is that retailers ________.

A) are more prone to use broadcast media than manufacturers

B)  typically have broader geographic target markets

C)  have more geographically concentrated target markets than manufacturers

D)  are more concerned with image-related advertising

C)  have more geographically concentrated target markets than manufacturers

Which characteristic of advertising as a retail medium is correct?

A) Media rates are generally higher for retailers than manufacturers.

B)  Since a large number of media are available, retailers are generally able to match a medium to a target market.

C)  A strength of advertising is its ability to tailor messages to specific target markets.

D)  Advertising messages are generally long (in terms of time or space).

B)  Since a large number of media are available, retailers are generally able to match a medium to a target market.

Retailers spend the highest proportion of their advertising budgets in which medium?

A) telephone directories

B)  direct mail

C)  newspapers

D)  flyers/circulars

C)  newspapers

A characteristic of direct mail is a ________.

A) high response rate

B)  low throw-away rate

C)  highly targeted audience

D)  long lead time

C)  highly targeted audience

Which medium is characterized by large-size ads and zoning difficulties?

A) flyers/circulars

B)  telephone directories

C)  outdoor advertising

D)  direct mail

C)  outdoor advertising

An advertisement in a local newspaper, featuring low interest-rate financing for consumers that purchase a top-of-the-line refrigerator, illustrates a(n) ________ ad.

A) institutional

B)  competitive

C)  reminder

D)  pioneer

B)  competitive

Image-related advertising illustrates a(n) ________ advertisement.

A) pioneer

B)  reminder

C)  competitive

D)  institutional

D)  institutional