1. Andrea wants to build top of the mind awareness for her nail shop. The best way for her to develop this
awareness would be to
A. partner with her vendors to bring great merchandise into the store.
B. offer better customer service and good publicity will naturally spread.
C. teach nail design classes.
D. repeatedly expose customers to the name of the shop through advertising.
2. For most of the past century, Sears enjoyed the success of Craftsman brand tools. Since Sears
communicates the brand's durability through advertisement, performance and guarantees, Craftsman is the
leading brand of choice for consumers interested in purchasing tools. Which of the following statements
best describes Sears' communication program?
A. Advertising alone was the strategy for Craftsman's success.
B. Sears created and maintained a long-term communication program about the Craftsman brand.
C. Positive publicity single-handedly lifted Sears out of the marketing slump it had been experiencing for the past decade.
D. Sears created a short-term objective of increasing sales.
3. Which of the following does not describe fashion merchandise categories?
A. Buyers for fashion merchandise categories have much more flexibility in correcting forecasting errors.
B. They have a short life cycle.
C. Buyers often don't have a change to reorder additional merchandise after an initial order is placed.
D. Forecasting the sales for fashion merchandise categories is more challenging than forecasting for staple goods.
4. A bookstore is considering stocking a limited edition of Alice in Wonderland dolls at a cost of $125 each.
The manager calculated the retail price with an initial markup percentage of 48 percent and plans to ticket
the product with a ".00" ending. What would the initial retail price be on the doll?
5. Luke was interested in developing a communication budget for his holistic vitamin shop that he will be
opening in thirty days. He is planning a few promotional sales and will advertise through local newspapers.
With the available information, what method would be best for Luke to pursue to develop his
A. Percentage of sales method
B. Affordable method
C. Objective and task method
D. Competitive parity method
6. Which of the following statements does not describe the approach that deals with cycle (base) stock?
A. Shorter delivery time from the vendor will reduce the level of base stock.
B. One approach for reducing the base stock is to reorder and receive merchandise from the vendor more often.
C. A retailer tries to reduce the base stock to keep its inventory investment low.
D. More frequent orderings with smaller quantities will reduce transportation costs.
7. Which of the following statements about markdowns is false?
A. Buyers employ markdowns to promote merchandise and increase sales.
B. A buyer's objective is to minimize markdowns.
C. Markdowns are part of the cost of doing business, and thus, buyers plan for them.
D. Buyers set the initial markup price high enough that, even after markdowns and other reductions have been taken, the planned
maintained markup is still achieved.
8. When marketers will ask questions and seek options of consumers about products from a group of
teenagers, this would be an example of a/an
A. source of secondary information.
B. mall intercept participant.
C. on-site surveying tool.
D. focus group.
9. Which of the following issues would not be appropriate for buyers to discuss with a vendor that has been
performing well above their planned gross margin?
A. Terms of purchase
B. Markdown money provisions
C. Advertising allowances
D. Margin enhancing opportunities
10. Janessa prefers high-end cosmetics but also likes a good deal. She only purchases her make-up at
department stores when they have a gift with purchase. Today she saw at Macy's that if she buys $35
worth of Lancôme cosmetics she would receive a gift with purchase. This gift with purchase is a form of
what kind of sales promotion?
D. Special event
11. Which of the following statements describes situations in which markdowns would not be appropriate?
A. Markdowns would be appropriate for a group of t-shirts that have a higher turnover than other t-shirts in the department.
B. Markdowns would be appropriate on a pair of pillows that had been part of a display and were showing light wear.
C. Markdowns would be appropriate for national brand merchandise that was priced 15 percent lower in a neighboring
D. Markdowns would be appropriate for licensed merchandise supporting a movie that was not as popular as predicted.
12. Charging each individual customer a different price based on their willingness to pay is called
A. second-degree price discrimination.
B. first-degree price discrimination.
C. self-selected variable pricing.
D. price bundling.
13. Competing retailers agreeing to sell products at set prices so as not to compete is using
A. MSRP pricing.
B. vertical price fixing.
C. horizontal price fixing.
D. predatory pricing.
14. Cliff struggled with the price of produce at his well-established produce markets. The reputation of the
markets has attracted repeat customers from a 50-mile radius. Recently, local farmers have been increasing
produce prices for him due to the upsurge in gas prices. Now Cliff feels it is time to pass the costs onto his
customers. What should Cliff predict in regards to how his customers will respond?
A. Sales may decrease.
B. The customers will think the produce quality is worth the price.
C. Nothing will keep sales down and business will continue as usual.
D. Increasing prices will increase sales because the produce will be perceived as better quality.
15. Which of the following does not describe an approach for buying national brand merchandise?
A. Buyers using reverse auctions.
B. Buyers discuss the performance of the vendor's merchandise during the previous season during market weeks.
C. Buyers meet national brand vendors in wholesale market centers.
D. Buyers attend trade shows to see the latest products and styles.
16. A retailer's magazine advertising campaign builds an image of elegance and high fashion, yet the store's
sales promotions emphasize low prices. Because of the inconsistencies, consumers are left confused about
the retailer's image and tend to shop elsewhere. To resolve the problem of inconsistency with the
communication mix, the manager should
A. reexamine the elements of the mix that can be eliminated.
B. develop an integrated marketing communication program.
C. determine which communication program works best for her local market.
D. retrain associates to support the image of elegance and fashion.
17. Retailers often say they are "going to market." What does "market" mean in this context?
A. A geographic location where the retailer anticipates remarkably good prospects for above average levels of sales.
B. A concentrated area where vendors are permanently located and show new merchandise during certain times of the year.
End of exam
C. The target consumers at whom a line of merchandise will be aimed.
D. A shopping center in which the firm plans to open a new store.
18. Janine buys swimwear for chain store and while at a recent trade show, she took the opportunity to
meet with a few vendors. During one meeting a vendor that she normally purchases from each season,
proposed a weekend in the Cayman Islands to view the swimwear that European tourists were wearing.
Janine knows that it would be beneficial for trend direction to see what European tourists are wearing and
then translate what she is seeing into her assortment for her target customer. Before she could further
discuss this offer with the vendor, what should she do?
A. Inform her divisional merchandise manager of the proposal
B. Look at her budget to see how much product she would be able to purchase from this vendor this season
C. Be certain that all her work is completed before she leaves for an extended weekend
D. See what other vendors might be offering
19. Companies are practicing _______ market products to be environmentally friendly for the purpose of
gaining public approval and higher sales rather than to actually improve the environment.
A. green sheen
B. fair trade
C. black marketing
20. Which of the following factors does not contribute to the increase of buffer stock level?
A. Long lead time for delivery from the vendor
B. Frequent store deliveries
C. Fluctuations in vendor lead time
D. High fluctuations in demand
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