MKTG 3335 Chapters 11-14 TB Questions
Which type of retailer is MOST likely to use first-degree price discrimination?
An antique shop
What can a retailer do to keep customers from being confused about the retailer's image?
Develop an integrated marketing communication program to deliver a consistent message.
What is the first step in merchandise management planning?
Developing a forecast for sales
Which of the following is a reason why retailers tend to use magazines for image advertising?
High reproduction quality
_____ are products developed by retailers.
Store brands
Why do vendors encourage retailers to sell at MSRP?
To reduce retail price competition among retailers
________ of a merchandise category is the number of different merchandising subcategories offered.
Variety
The premium option in the multiple price tiers created for store brands offers:
consumers quality that is comparable to that of national brands.
The percentage of SKUs received complete on a particular order from a vendor is called the
fill rate.
A retailer's merchandise group is managed by a
general merchandise manager (GMM).
Under the competitive parity method, the communication budget is set so that
it is equal to the communication expenditure of competitor(s).
Retailers use ________ to determine the communication budget by forecasting sales during the budget period and then applying a predetermined percentage to set the budget.
percentage-of-sales method
A _____ offers an item for free or at a bargain price to reward some type of behavior, such as buying, sampling, or testing.
premium
A(n) _____ developed by a retailer is comparable with national brands on quality rather than price.
premium brand
When a grocery retailer develops its own high quality private-label organic food product, this would be a(n) _____.
premium brand
A freestanding insert (FSI) is also called a(n) _____.
preprint
Manuel's vacation to Chicago for $395 for three nights in a four star hotel on Michigan Avenue included airfare and accommodation. If these services were availed individually, it would have been expensive. This form of second-degree price discrimination is referred to as _____.
price bundling
Techno Comp is a well-known national brand of computer and electronic products and accessories. Their tablet would be considered a(n) _____.
subbrand
When developing a retail communication program, a marginal analysis takes place when
the budget is determined.
The owner of a jewelry retail chain estimated advertising at $4,000 for the year and estimated the downtown store location's market share at 35 percent. By using the competitive parity method, what is the jewelry downtown store location's communication budget?
$1,400
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?
$240
The merchandise cost from the vendor for an MP3 player is $82.50, and the retailer who is selling the device wants to use an initial markup percentage of 67 percent. Calculate the initial retail price.
$250
The retail price of a sweater is $75, and the initial markup is 51 percent. Calculate the cost of the product.
$36.75
Frankie is a buyer for a department store and is buying some handbags at a cost of $30 from a vendor. He desires to have a 60% markup to meet the financial goals of this category. What will be the retail price of these handbags?
$75
Smith's Electronics originally priced a private-label portable DVD player at $90, and then sold 1,500 units per week. After raising the price to $100, sales dropped to 1,000 units per week. First, determine the price elasticity, and then determine the profit-maximizing price if the private-label portable DVD player costs $50.
$75
Which of the following is the formula to determine the return on investment for an advertisement?
(Net sales - Advertising cost)/Advertising cost
A retailer originally priced a private-label portable DVD player at $99 and sold 1,200 units per week. After raising the price to $120, sales dropped to 1,000 units per week. What would the item's price elasticity be?
-.7855
A sponsored link was delivered 100 times, and 10 people clicked on it. Calculate the click-through rate.
10
Calculate the return on investment for an advertisement from the given data. Net sales is $1,000, and advertising cost is $50.
19
Ferdinand runs a pie shop in a busy metropolis. He sells his fresh pies for $7, but it costs him $2.50 to make them. The cooking equipment in his shop cost him $46,000. How many pies does Ferdinand need to sell to make $50,000 annually?
21,333 pies
Mattie owns a clock shop featuring vintage clocks from the 1950s. Mattie plans to achieve a 40% maintained mark-up, and her reductions are planned at 4%. What is her planned initial markup percentage?
42.3%
Joe keystones every product's price in his skateboard store. Therefore, the initial mark-up percent that Joe uses is:
50 percent.
Eunice buys a worm farm. She plans to sell a small carton of worms to people who want to fish for $3. Her fixed costs are $1,201, and her variable cost for each carton sold is $.75. How many cartons of worms does Eunice need to sell to reach her break-even quantity?
534
The Bow Shop caters to archery enthusiasts. It sells bows starting at $300. The maintained markup used by the store is 60 percent. Reductions are estimated to be 12 percent. Calculate the store's planned initial markup percentage.
64.29 percent
Father Christmas is a retail store that sells a unique Santa made from fur, wool, and tapestry. If 150 customers wish to buy a Santa from this store, and it sells 120 before running out of stock, what is its service level?
80 percent
A drugstore purchases hand cream at $2 per jar and sells them for $15. What is its markup percentage?
87%
When a swimwear buyer negotiates for delivery and exclusivity with a vendor, what would a buyer typically want?
A buyer would want unique swimwear to arrive early in the season to get the most sales at the original price.
Which of the following statements is NOT true of markdowns?
A buyer's objective is to minimize markdowns.
Which of the following is not true of category management?
A category manager is also called a category captain and works with vendors to get the most profit from collaborative relationships.
What is the best reason for retailers to develop and maintain relationships with multiple and sometimes competing suppliers?
A function of retailers is to provide assortments, so they must deal with a variety of suppliers.
Retail chains typically classify each of their stores on the basis of annual sales. According to this classification,
A stores would have the largest sales volume.
A(n) ________ identifies the performance of individual SKUs in the assortment plan.
ABC analysis
Which of the following strategies is NOT viable for liquidating markdown merchandise?
Adopt a keystoning strategy.
_____ entails the placement of announcements and persuasive messages purchased by retailers and other organizations that seek to inform and/or persuade members of a particular target market or audience about their products, services, organizations, or ideas.
Advertising
Which of the following statements is not a potential problem with appointing vendors as category captains?
Appointing vendors as category captains makes merchandise management tasks difficult for retailers.
Retailers often find the 80-20 principle evident within the ABC analysis. What does the 80-20 principle imply?
Approximately 80 percent of a retailer's sales come from 20 percent of its products.
________ of a retailer's merchandise is the number of SKUs within a subcategory.
Assortment
Which among the following is the largest group of national advertisers in the United States?
Automobile industry
Which of the following pricing practices employs tactics such as inadequate inventory for advertised products?
Bait and switch
_____ is an unlawful, deceptive practice which lures customers into a store by advertising a product at a lower-than-normal price and then, once they are in the store, induces them to purchase of higher-priced model.
Bait and switch
Which of the following is not true of staple merchandise categories?
Because their sales are relatively steady from day-to-day, a periodic inventory system is used.
_____ is an analytical tool which enables retailers to know of units they need sell to begin making a profit.
Break-even analysis
_____, also known as stocklifts or lift-outs, are activities engaged in by vendors with retailers to get their products into retail stores.
Buybacks
Which of the following is not true of fashion merchandise categories?
Buyers for fashion merchandise categories have a high degree of flexibility in correcting forecasting errors.
Which of the following does NOT describe an approach for buying national brand merchandise?
Buyers using reverse auctions to procure seasonal merchandise
How can a retailer that wants to use an EDLP strategy persuade customers away from high/low strategy competitors?
By assuring customers of low prices
How does a national retailer benefit from selling private-labels?
By selling private-labels, a national retailer can differentiate its assortments.
Which of the following is the LEAST profitable method of liquidating markdown merchandise?
Carry the merchandise over to the next season.
Which of the following persons is a vendor who forms an alliance with a retailer to help gain consumer insight, satisfy customer needs, and improve performance and profit across a category?
Category captain
_____ are customers who go from one store to another, buying only items that are on special.
Cherry pickers
_____ are private-label products produced by the retailer that imitate the national brand in both appearance and packaging, but are often offered at a lower price.
Copycat brands
Which of the following has enabled retailers to personalize their direct mail to all customers?
Customer relationship management programs
What is an advantage of selling private-label brands for a national retailer?
Customers can't compare prices for private-label products because of their exclusivity.
Which of the following statements holds true for individualized variable pricing?
Customers may feel that they are being treated in an unfair manner.
________ refers to inventory for which the level goes up and down in response to the replenishment process.
Cycle stock
_____ are taxes collected by a government on imported merchandise.
Duties
A retailer has to confirm the receipt of an online shipping order to its customer. Which of the following mediums is best suited for this purpose?
Which of the following statements holds true for an everyday low-pricing (EDLP) strategy?
EDLP retailers do not have to incur the labor costs of changing price tags.
Which of the following is typically the first step in developing a retail communication program?
Establish objectives.
Target Field in Minneapolis, Minnesota, "Home of the Twins" baseball team venue is an example of what type of communication method?
Event sponsorship
Which of the following is a negotiation issue that is often used in fashion merchandise categories?
Exclusivity arrangement
_____ is a socially responsible movement that ensures that producers receive adequate prices for their products.
Fair trade
________ consist of items that are only in demand for a relatively short period of time.
Fashion merchandise categories
Which of the following merchandise systems focuses on staying as close to out of stock as possible?
Fashion merchandise management system
Which of the following items has the most price elasticity?
Fast-food
Gains.com is a website which features a wide range of products from different retailers put up for auction. The retailers charge customers based on their willingness to pay to maximize profits. Which pricing technique is being used by the retailers who put their products for auction on Gains.com?
First-degree price discrimination
Which of the following is not true of a fashion merchandise category?
Forecasting sales for this category is simplistic and predictable.
Which of the following is true of the forecasting approach for staple merchandise categories?
Forecasts are typically based on extrapolating historical sales.
Which of the following statements does not describe the approach that deals with cycle (base) stock?
Frequent orderings with smaller quantities will reduce transportation costs.
Which of the following factors does not contribute to the increase of buffer stock levels?
Frequent store deliveries
Which of the following is neither a store brand nor a national brand?
Generic brands
_____ target a price-sensitive segment by offering a no-frills product at a discount price.
Generic brands
_____ is the concept of offering customers localized promotions of retailers in close proximity of their mobile phones.
Geofencing
_____ involve the flow of merchandise through distribution channels, usually across international borders, other than those authorized or intended by the manufacturer or producer.
Gray-market goods
In the late 90s, Sears spent much of its communication budget advertising the "Softer Side of Sears" campaign since it felt the customer knew very little of Sears' apparel assortments and thus there would be a substantial return from advertising apparel versus advertising the more known appliances. What principle for budget allocation was Sears potentially using?
High-assay principle
Which of the following is typically the last step in developing a retail communication program?
Implement and evaluate programs.
_____ are imposed by governments to shield domestic manufacturers from foreign competition.
Import tariffs
Which of the following is a result of high inventory turnover?
Improved employee morale
Which of the following processes is an unstructured form of personal questioning used in market research and involves extensive probing to get individual respondents to talk in detail about a subject?
In-depth interview
Which of the following is a well-stated communication program objective?
Increase brand awareness by 15% in the next 6 months.
Which of the following is NOT a benefit typically ascribed to an everyday low pricing (EDLP) strategy?
Increased sale advertising
Which of the following products is an example of a classification?
Infant apparel
A vendor's recent shipment at the retailer's distribution center was on time, but the boxes were mislabeled along with other infractions against the retailer's mandated shipment policies. What should the retailer do?
Issue a chargeback.
What is the outcome when a retailer sells counterfeit merchandise?
It can destroy the relationship with the vendor of the legitimate brand.
Which of the following statements is a limitation of the rule-based approach to taking markdowns?
It does not consider the demand for merchandise at different price points.
Some retailers liquidate end-of-season merchandise to retailers like T.J. Maxx, who in return sell it at a deep discount. What is the benefit to the retailer who liquidates merchandise using this strategy?
It helps retailers recoup a percentage of the merchandise cost.
How does an improved inventory management through the use of an everyday low pricing (EDLP) strategy benefits retailers?
It increases the total sales.
Which of the following statements does NOT describe a benefit of markdowns for a retailer?
It is a way to gain a higher gross margin.
Which of the following is true of collaborative supply chain management?
It is difficult to implement these strategies when sourcing globally.
Which of the following statements is not true of a department in the merchandise classification scheme?
It is managed by a general merchandise manager (GMM).
Which of the following statements is true of a merchandise category?
It is the basic unit of analysis for merchandising decisions.
What is value?
It is the relationship between what consumers receive and what they paid for it.
Jenny runs a produce stand in an inner-city neighborhood. With the recent layoffs, she has become popular because she gives her day-old produce to the local charity. Which of the following benefits does Jenny gain by donating produce to the local charity?
It offers her strong public relations benefits.
How does optimization software help retailers in taking markdowns?
It updates pricing based upon actual sales and factors in differences in price sensitivities.
Which of the following is NOT a factor that retailers consider in setting prices?
Language barriers
________ is the amount of time between the recognition that an order needs to be placed and the point at which the merchandise arrives in the store and is ready for sale.
Lead time
Why are inventory carrying costs higher for retailers who source internationally?
Lead times are longer, and there is a need to maintain higher levels of safety stocks.
_____ is the practice of pricing certain items lower than normal to increase customers' traffic flow or boost sales of complementary products.
Leader pricing
Target uses a Shopkick app to award points to customers who walk around a store and scan products; they can redeem these points for various rewards. Which of the following technologies will best suit this sales promotion?
M-commerce
Which of the following is set by vendors by withholding benefits such as cooperative advertising or even refusing to deliver merchandise to noncomplying retailers?
MSRP pricing
_____ is the actual sales realized for the merchandise minus its costs of the merchandise sold.
Maintained markup
In most cases, which of the following is a reason why it is very hard to perform a marginal analysis?
Managers don't know the relationship between communication and sales.
________ is based on the economic principle that firms should increase communication expenditures as long as each additional dollar spent generates more than a dollar of additional contribution.
Marginal analysis
_____ refers to funds vendors give retailers to cover lost gross margin dollars.
Markdown money
Which of the following statements on markdowns is FALSE?
Markdowns are an unnecessary part of business if planned correctly.
Which of the following statements describes a situation in which markdowns would NOT be appropriate?
Markdowns would be appropriate for a group of t-shirts that have a higher turnover than other t-shirts in the department.
Which of the following is an example of staple merchandise?
Men's black socks
Which of the following schemes is the correct order describing the levels of the merchandise classification scheme from the highest level to the lowest level?
Merchandise Group-Department-Classification-Category-SKU
Which of the following is the process by which a retailer attempts to offer the appropriate quantity of the right merchandise, in the right place, and at the right time, while meeting the company's financial goals?
Merchandise management
Giant, a retail store, is offering two 6-packs of beer for $5. The price for a single tin is $2.69. What pricing strategy is Giant using?
Multiple-unit pricing
Luke was interested in developing a communication budget for the holistic vitamin shop he will be opening in 30 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 communication program?
Objective-and-task method
At the new toy store that opened near his home, Ryan noticed all the products were priced at $.49, $.79, or $.99 endings. What type of pricing is the store following?
Odd pricing
Which of the following statements about assortment is not true?
Offering a large assortment normally simplifies a customer's buying decision.
Which of the following is NOT an example of a second-degree price discrimination strategy?
Online auction bidding
When Whitney took over her father's sporting goods store, she evaluated some of her father's vendor relationships. She found that Rodney's Exercise Wear wasn't particularly profitable for the store. Although committed, his products were expensive, and he seemed inflexible. Whitney tried to work out a more amicable relationship with him by discussing her sales goals and new ideas for the coming year, but Rodney seemed uninterested. Which of the following elements crucial for maintaining strategic relationships is absent in the given example?
Open communication
Which of the following factors is considered by retailers in making merchandise allocation and promotion decisions specific to difficult economic times?
Paycheck cycle
Which method for determining a communication method helps to ensure that the retailer will not spend beyond its means?
Percentage-of-sales method
_____ is a communication process in which sales associates help customers satisfy their needs through face-to-face exchanges of information.
Personal selling
David visits a supermarket to buy milk and eggs. At the checkout counter, waiting to pay, he impulsively picks up a magazine from one of the display shelves. Which of the following terms best reflects the supermarket's strategy?
Point-of-purchase display
Janessa prefers high-end cosmetics, but she 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?
Premium
_____ are advertisements printed at the retailer's expense and distributed as an insert in the newspaper.
Preprints
_____ is the practice of offering two or more different products or services for sale at one price.
Price bundling
Cliff struggled with the price of produce at his well-established produce markets. The reputation of the markets attracts repeat customers from a 50-mile radius. Recently, local farmers started 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. Which of the following should Cliff estimate to determine the effect of price changes?
Price elasticity
Which of the following is not a factor that determines the level of required backup stock?
Price of the product
If there are so many advantages to selling national brands, why do retailers still carry private-label brands?
Private-label brands yield higher profits to retailers.
Which of the following terms is defined as the percentage of demand for a particular SKU that is satisfied?
Product availability
________ is also referred to as the level of support or service level.
Product availability
Michael, an actor, plays the protagonist in a sitcom. As per his contractual obligations, he is required to be seen drinking Fizzy Cola, a brand of soda pop, at least once in every episode. Which of the following terms best reflects this situation?
Product placement
As a vendor, Melissa works well with a buyer she's known for years at Dream Toys. This year, Melissa's line of toys had a few products that sold poorly, and it is now time to show the Dream Toys' buyer the next holiday season's product line. Melissa knows the Dream Toys' buyer will be a hard negotiator. What should Melissa be prepared to do?
Provide markdown money.
Which of the following is a subjective issue associated with global sourcing?
Quality control
Which of the following is not a benefit of a high inventory turnover?
Reduced gross margin
When contemplating sourcing products internationally, which of the following would NOT be an additional cost associated with global sourcing?
Reduced lead times
Which of the following is true of store brands?
Retailers develop the design for these products in most cases.
Which of the following is a drawback for a retailer offering national brands?
Retailers have to discount some national brands in order to attract customers to their stores because customers compare prices for these brands across stores.
Which of the following prohibits vendors offering different retailers different prices and purchase order terms for the same merchandise and quantity?
Robinson-Patman Act
Which of the following statements does not describe the trade-offs that buyers should consider for merchandise assortment planning?
SKU rationalization programs can help in increasing inventory turnover without reducing sales.
Which of the following statements is not true of the merchandise classification scheme?
SKUs are the basic units of analysis for making merchandising management decisions.
Which of the following forms of communication is the most expensive?
Salespeople
Peter visits a local supermarket to buy groceries. While shopping, a sales executive approached him and enquires if he would be willing to try out a new brand of cookies. Which of the following terms best reflects the supermarket's strategy?
Sample
Which of the following is classified as in-store marketing?
Sample
Which of the following merchandise categories is purchased in a manner similar to fashion merchandise?
Seasonal merchandise
________ categories consist of items whose sales fluctuate dramatically depending on the time of year.
Seasonal merchandise
_____ is the practice of offering the same multiple-price schedule to all customers and encourages price-sensitive customers to take advantage of the lower price.
Second-degree price discrimination
Which of the following analysis techniques compares actual and planned sales to determine whether more merchandise is needed to satisfy demand or whether price reductions are required?
Sell-through analysis
Louise runs a successful shop in Chicago featuring unique dolls from Western Europe. Louise speaks German and a little Dutch, but no Italian, French or Spanish. Which of the following is the best way for Louise to procure dolls from all western European countries?
She can utilize a resident buying office when she visits Europe to buy.
Janine buys swimwear for a chain of apparel stores. At a recent trade show, she took the opportunity to meet with a few vendors. During a meeting with the vendor that she normally purchased from each season, he proposed a weekend in the Cayman Islands to view the swimwear that European tourists were wearing. Janine knows that it would be beneficial to see what European tourists are wearing and then translate what she is seeing into her assortment for her target customers. Before continuing her discussions with the vendor, what should she do?
She must inform her divisional merchandise manager of the proposal.
_____ enables customers with mobile devices to check prices in stores and purchase online, ostensibly at a lower price.
Showrooming
Which of the following is a drawback of selling private-label merchandise?
Significant investment is needed to develop, manage, and market private-label brands.
_____ are charges imposed by a retailer to stock a new item.
Slotting allowances
The famous designer, Isaac Mizrahi, made a scheduled appearance at Borders bookstore in Mall of America to sign copies of his book "How to Have Style". This is an example of what type of communication method?
Special event
Which of the following statements holds true for the purchase of staple merchandise?
Staple merchandise is purchased using a continuous replenishment system by monitoring sales and generating replacement orders.
Which of the following products is not an example of a stock-keeping unit (SKU)?
Teen necklaces with matching bracelets and rings
Which of the following statements is true of the ABC analysis?
The SKUs in a merchandise category are rank-ordered by several performance measures.
Fantasy and Stanley's are popular apparel stores. A Fantasy vendor has offered a Stanley's buyer an attractive discount on merchandise that had been returned to Fantasy by a different retailer. The Stanley's buyer realizes the high gross margin opportunity but refuses the offer nevertheless. Why?
The buyer wants to preserve Stanley's image as a fashion leader by not selling returned merchandise that could be out of season.
Which of the following is an example of a variable cost for a retailer of electronic equipment?
The cost associated with the free pack of paper for every computer printer sold
Which of the following is an example of a fixed cost for a bridal gown shop?
The cost of the mannequin used to display current gowns
What is the potential byproduct of promotional markdowns?
The increased in-store traffic can lead to the purchase of other products at regular prices.
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. What should the store manager do to resolve the problem of inconsistency with the communication mix?
The manager should develop an integrated marketing communication program.
Which of the following best describes variety?
The number of different merchandising subcategories within a store
Which of the following is the formula for calculating click-through rate?
The number of times a user clicks on an ad/Number of impressions
Which of the following statements does not describe the relationship between product availability and stock level?
The quantity of backup stock is fixed by a retailer and is not influenced by product availability.
Which of the following is not true of reverse auctions?
The retailer chooses the lowest bidder regardless of other factors.
Which of the following is a reason for the decline in the growth of newspaper advertising by retailers?
The retailers have begun using other media
What is the drawback of utilizing category captains?
The vendor category captain could take advantage of their position and maximize their own sales.
Which of the following factors influences reductions?
Theft and accounting errors
Which of the following is NOT descriptive of a trade show?
Trade shows are often associated with wholesale market centers.
A retailer wants to announce up-to-date and fast changing information to excite customers. Which of the following platforms will best suit the retailer's needs?
Which of the following is classified as a microblog?
Why are vendors in a better position to manage a category than a smaller retailer?
Vendors have superior information through their focus on a specific category.
A retailer has developed a promotional video for his business. Which of the following new media platforms is best suited to host this video on the internet?
Youtube
_____ refers to charging of different prices for different stores, markets, or regions.
Zone pricing
Yield management means:
adjusting prices in response to demand in order to control sales generated.
The ________ method assumes that communication expenses are just a cost of business and do not promote sales and profit.
affordable budgeting
The ________ method uses the difference between the forecasted sales and the expenses plus the desired profit for the communication budget.
affordable budgeting
When retailers use the ________ method, it is easiest to cut communication program expenses if retail sales fail to meet the sales plan rather than increasing the communication expenses to try and generate additional sales.
affordable budgeting
After developing a plan for managing merchandise within a category, the next step in the merchandise management process is to
allocate the merchandise to the stores.
After developing a plan and allocating the merchandise, the next step in the merchandise planning process involves
analyzing the performance and making adjustments.
One way for a buyer to become familiar with products and styles is to:
attend trade shows.
Randolph is the divisional merchandise manager for home products for Daisy's, a supermarket. At a recent trade show, he noticed small kitchen appliances being shown in retro colors like pistachio, eggplant, and cotton candy. Knowing the kitchen designs were moving in this direction, he decided to discuss it with his senior buyers to see if these retro colors would suit the Walmart market. Randolph is in the _____ phase of building strategic relationships.
awareness
A catalog retailer of kitchen items observes that during some weeks it sells 40 muffin pans, and during other weeks it sells none. A reorder takes up to three weeks. The probability of running out of pans and alienating its customers can be alleviated by maintaining
backup stock.
Since sales and the arrival of merchandise from vendors can't be predicted with perfect accuracy, retailers have to carry
backup stock.
A price experiment:
can be used to measure the price sensitivity of customers.
National brands:
can limit a retailer's flexibility.
By sharing common goals, buyers and vendors:
can pool their strengths and abilities to exploit potential opportunities.
When pricing products, retailers must:
choose a pricing policy considering the company's overall strategy.
A ________ is a group of items targeting the same customer type, such as girls' sizes 4 to 6.
classification
A sporting goods retailer anticipates running a print advertisement campaign during the beginning of the year in support of customers' anticipated New Year's resolutions to get in physical shape. The sporting goods retailer asks its key vendors to partner with it in covering the expenses of the ad campaign. Vendors agree to support the ________ as long as they are certain that their products will be featured in the advertisements.
co-op advertising
In a national print advertisement, Levi's was showcasing its new line of denim jackets. At the bottom of the ad, the Macy's logo was found as a place where the new jackets could be purchased by customers. This is an example of
co-op advertising.
Steve buys men's dress shirts for Martin's, a clothing retailer. At a recent trade show, he took the opportunity to see a few new vendors. During one meeting, a vendor proposed a ticket to a coveted college football game. Steve graciously declined because he was concerned he would be engaging in _____.
commercial bribery
Similar to the other rule-of-thumb methods, the ________ doesn't allow retailers to exploit the unique opportunities or problems they confront in the market.
competitive parity method
A(n) ________ is a promotional program undertaken by a vendor and a retailer working together.
cooperative program
Popular national brands are placed next to a manufacturer's brands in a store and look like them. This kind of brand is called a(n) _____.
copycat brand
The second highest level in the merchandise classification structure is the
department.
Violations of human rights are avoided by _____.
enforcing core labor practices
The Macy's Thanksgiving Day Parade is an example of _____.
event sponsorship
A(n) _____ strategy emphasizes the continuity of retail prices at a level somewhere between the regular nonsale price and the deep-discount sale price of high/low retailers.
everyday low-pricing
A(n) _____ is a brand that is developed by a national brand vendor, often in conjunction with a retailer, and is sold solely by the retailer.
exclusive brand
The only retailer that offers Fresh Sun organic food products is Daily Needs. Therefore, Fresh Sun is an example of a(n):
exclusive brand
Isabel works as a senior jewelry buyer for a department store chain. On a recent visit to a trade show, she noticed a new vendor selling unique earrings, necklaces, and bracelets made of glass. She had seen such pieces in trade magazines, but initially ignored them because of the exorbitant price. She thought her affluent customers would appreciate the look, so she decided to talk with the sales representative to learn more about the possibility of a trial in only a few of her top stores. Isabel is in the _____ phase of building strategic relationships.
exploration
Periodic price audits are completed at retail stores to ensure that the:
extent and cause of scanning errors are identified.
Charging each individual customer a different price based on their willingness to pay is called _____.
first-degree price discrimination
A(n) ________ is a small group of respondents interviewed by a moderator using a loosely structured format in which participants are encouraged to express their views and comment on the views of others in the group.
focus group
Companies are practicing _____, which is the practice of marketing products or services as being environmentally friendly with the purpose of gaining public approval and sales rather than actually improving the environment.
green sheen
A performance measure which assesses a buyer's contribution to ROA is called the
gross margin return on investment.
When negotiating with a vendor, the best outcome for a retailer would be to:
have mutual gain.
The retailer allocates the budget to areas that will yield the greatest return. This approach for allocating a budget is referred to as the
high-assay principle.
Retailers using a(n) _____ strategy frequently—often weekly—discount the initial prices for merchandise through sales promotions.
high/low pricing
An agreement between retailers that are in direct competition with each other to set the same prices is called _____.
horizontal price fixing
In new media, ________ refer to the number of times an ad appears in front of the user.
impressions
A(n) ________ indicates the decision variables set by the buyer, such as product availability, the backup stock needed to provide the product availability, and the order points and quantities.
inventory management report
A price experiment:
is method of determining the most profitable price for a product.
The approach of using 50 percent markup is known as _____ because of which the retail price would be double the cost.
keystoning
All of the following are terms for products developed by retailers EXCEPT _____.
manufacturer's brands
National brands are also called _____.
manufacturer's brands
Reductions in the initial retail prices are known as _____.
markdowns
The _____ is the difference between the retail price and the cost of an item.
markup
A ________ is the basic unit of analysis for making merchandise management decisions.
merchandise category
The highest classification level in a buying organization is the
merchandise group.
The ________ is the number of each SKU in the assortment plan that the buyer wants to have available for purchase in each store.
model stock plan
The ________ method for evaluating vendors uses a weighted-average score for each vendor.
multiattribute analysis
Tide detergent, Ralph Lauren polo shirts, and Hewlett-Packard printers are all examples of _____.
national brands
When there is a high inventory turnover, there is an increase in sales because
new merchandise is continually available to customers.
The ________ determines the budget required to undertake specific tasks to accomplish communication objectives.
objective-and-task method
When developing a retail communication program, sales goals are set when the
objectives are established.
A(n) ________ is used to keep track of the actual merchandise flows—what the present inventory level is, when purchased merchandise is scheduled for delivery, and how much has been sold to customers.
open-to-buy system
In staple merchandise management systems, the ________ is the amount of inventory below which the quantity available shouldn't go or the item will be out of stock before the next order arrives.
order point
For a multi-chain's new store location, the most inappropriate communication program budget method would be
percentage-of-sales.
The retailer's information system determines the ________ by comparing the sales made through the POS terminals with the shipments received by the store.
perpetual inventory
Home Day is a large supermarket. It recently launched its own brand of cereals called Fast Bites equivalent to most national brands and also priced slightly lower. Therefore, Fast Bites is an example of a(n) _____.
premium store brand
A travel brochure shows that a couple can buy a round trip ticket to Orlando, a three-day pass to Disney World, car rental for four days, and hotel accommodations for 5 nights for $1200 per person. These services are expensive when availed individually. This offer is an example of _____.
price bundling
A commonly used measure of price sensitivity is _____.
price elasticity
Dream Homes is an appliance store. It recently launched its own brand of freezers in order to build customer loyalty. The store launched three different models to cater to low, middle, and high income groups. The freezers are also priced accordingly. These freezers are exclusive to Dream Homes and cater to all customer segments. This pricing strategy involving price points within a merchandise category is known as _____.
price lining
Target Corporation is planning to give $500 million by the end of 2015 to support education and help kids learn to read. Since 1962, Target has committed 5% of its income to support local communities. Target uses _____ to communicate their continued commitment to local communities.
public relations
When a retailer makes a generous contribution to a charity and the event is covered on the evening news, it would be a method of communicating through _____.
public relations
Linda is a fashion designer who sourced out to a manufacturer in India in order to assemble her fall line. She assumed the patterns for the clothes were simple, and she deemed it unnecessary to personally visit the factory and supervise the workers sewing her clothes. Months later, the shipment arrived in New York and, the seams on all of the blouses were sewn incorrectly. This mishap is an issue of _____.
quality control
A _____ is a promise to customers to sell currently out-of-stock merchandise at the advertised price when it arrives.
rain check
Left Lanta is a small retailer in Underground Atlanta, a historical retail district in that city. Here, the Lanta family sells items for left-handed people. Since the store is located in a kiosk near one of the entrances to the underground, it is often the target of shoplifters. Therefore, the store is forced to reduce the actual selling price of its products. The factors such as theft that cause the reduction in the selling price are called _____.
reductions
A _____ is the price against which buyers compare the actual selling price of the product, and thus it facilitates their evaluation process.
reference price
Yves, an English speaking Frenchman, meets with buyers from the United States when they visit Paris. Once in Paris, the buyers rely on Yves to make appointments with French vendors to save time and penetrate the market. Yves works to help interpret and negotiate during the buyer-vendor meetings. Therefore, Yves works for a(n) _____.
resident buying office
Retailers use _____ to get quality private-label merchandise at low prices.
reverse auctions
The ________ uses past sales and communication activities to determine the present communication budget.
rule-of-thumb method
Garden rakes, lawn mowers, and sunscreen would be considered part of a(n) ________ category.
seasonal merchandise
Retailers are the _____ group of national advertisers in the United States.
second-largest
Retailers collect price data about their competitors to:
see if they need to adjust their prices.
The merchandise budget plan
specifies the level of inventory needed to support the sales.
Merchandise like men's crew socks, canned peas, college ruled loose leaf paper, and 60-watt light bulbs would be considered ________ that are in continuous demand over an extended time period.
staple merchandise
Smart Wash is a popular brand of detergent powder. The stock needs to be continuously replenished in stores and supermarkets due to its high demand. The detergent powder belongs to the category of
staple merchandise.
A(n) ________ is the smallest unit available for inventory control.
stock-keeping unit
Because of markdowns, discounts to employees and customers, and merchandise reductions, _____.
the actual selling price is lower than the initial sales price
An open-to-buy system compares
the planned and actual end-of-month inventory.
Retailers proactively engage in enforcing the labor practices of their suppliers because:
they want to ensure a safe and healthy work environment for laborers.
The practice of charging different prices to different demographic market segments is referred to as _____.
third-degree price discrimination
At FN Platform, vendors display their fashion footwear in designated areas at the Las Vegas convention center and have sales representatives available to talk with buyers as they walk through the exhibit area. This exhibition is an example of a _____.
trade show
A(n) _____ exists when a vendor and a retailer enter into an agreement that requires the retailer to take a product it doesn't necessarily desire to ensure that it can buy a product that it does desire.
tying contract
Spring Clean, Sparkle Glass, and Dazzle Floor are various cleaning liquids marketed under the brand name Clean Homes. Therefore, Clean Homes is a(n) _____.
umbrella brand
When identifying national brands, vendors use a(n) _____ associated with their company.
umbrella brand
Father Christmas is a retail store that sells a unique Santa made from fur, wool, and tapestry. The store does not sell any other product. Therefore, the store has little
variety.
A _____ for retail buyers is a concentration of vendors within a specific geographic location, perhaps even under one roof or over the Internet.
wholesale market
When making a good markdown decision, a retailer should:
work closely with its vendors and share the financial burden of the markdowns.
Catherine had checked the price of an airline ticket in November to fly to Daytona Beach for her spring break. She was surprised when she checked again in February that the price had increased significantly. The airline had adjusted its prices based on the demand. This practice is known as _____.
yield management