159) Which of the following retailers would best fit in quadrant B shown in the retail positioning
matrix, Figure 16-8 above?
A) Kmart
B) Bloomingdale’s department store
C) 7-Eleven convenience store
D) Payless ShoeSource
E) Lamborghini automobile dealer
160) Which of the following retailers would best fit in quadrant C shown in the retail positioning
matrix, Figure 16-8 above?
A) Kmart
B) Dillard’s department store
C) 7-Eleven convenience store
D) Payless ShoeSource
E) Lamborghini automobile dealer
161) Which of the following retailers would best fit in quadrant D shown in the retail positioning
matrix, Figure 16-8 above?
A) Kmart
B) Dillard’s department store
C) 7-Eleven convenience store
D) Payless ShoeSource
E) Tiffany & Co.
162) The activities related to managing the store and the merchandise in the store, which
includes retail pricing, store location, retail communication, and merchandise are referred to as
the
A) wheel of retailing.
B) distribution mix.
C) retail life cycle.
D) retailing mix.
E) retail store positioning.
163) The retailing mix refers to the activities related to managing a store, and includes
A) retail pricing, store location, retail communication, and merchandise.
B) product, price, promotion, and place.
C) the utilities of time, form, possession, and price.
D) the colors, sizes, shapes, and point-of-purchase display locations of the store’s products.
E) selection of store location, selection of merchandise, hiring and training of employees, and
promotion of both the store and products.
164) When developing retailing strategies, marketers develop a retailing mix, which includes
A) products, services, promotions, and retail communication.
B) promotions, publicity, and press releases.
C) retail pricing, store location, retail communication, and merchandise.
D) physical environment, people, process, and productivity.
E) direct mail, online stores, traditional stores, and outlet stores.
165) The retailing mix includes all of the following except which?
A) merchandise
B) target market
C) retail pricing
D) store location
E) retail communication
166) When setting prices for merchandise, retailers must decide on the markup, the markdown,
and the ________ for markdowns.
A) relevance
B) necessity
C) percentage
D) timing
E) consequence
167) A markup refers to
A) the difference between the final selling price and how the customer values the product.
B) selling brand name merchandise at lower than regular prices.
C) the amount added to the cost the retailer paid for a product to reach the final selling price.
D) the difference between the retail cost and initial selling price.
E) the reduction in retail price, usually expressed as a percentage equal to the amount reduced,
divided by the original price, and then multiplied by 100.
168) The amount added to the cost the retailer paid for a product to reach the final selling price is
referred to as a(n)
A) markup.
B) markdown.
C) original markup.
D) maintained markup.
E) cost-plus markup.
169) Jane Westerlund owns a small retail picture frame store in a local strip mall. She just bought
10 picture frames from a promising woodworker for $36 each. Based on market conditions, she
will sell these for $100 each. What is her markup in dollar terms?
A) $136
B) $64
C) $72
D) $360
E) $10
170) The difference between the retailer’s cost and the initial selling price is referred to as the
A) net margin.
B) maintained markup.
C) markdown
D) differential markup.
E) original markup.
171) A retailer bought a collectible Precious Moments figurine for $26. She sets the initial
selling price at $60. The final selling price was $52. What was the original markup?
A) $86
B) $13
C) $78
D) $34
E) $112
172) A maintained markup is
A) the difference between the final selling price and the retailer’s cost.
B) the initial selling price minus the amount paid by the retailer.
C) the amount the manufacturer adds to achieve the desired suggested retail price.
D) the net margin.
E) the highest price listed for the product.
173) The difference between the final selling price and the retailer’s cost is referred to as the
A) original markup.
B) maintained markup.
C) markdown.
D) differential markup.
E) discounted price.
174) Another term for maintained markup is
A) original markup.
B) maintained markup.
C) markdown.
D) gross margin.
E) net margin.
175) A retailer bought a collectible Precious Moments figurine for $26. She sets the initial
selling price at $60. The final selling price was $52. What was the maintained markup?
A) $112
B) $52
C) $26
D) $34
E) $86
176) Jane Westerlund owns a small retail picture frame store in a local strip mall. She just bought
10 picture frames from a promising woodworker for $36 each. Based on market conditions, she
will sell these for $100 each. Recently, however, sales have been a bit slow. Jane decides to
reduce the price for the frames to $80. What is her maintained markup in dollar terms?
A) $100
B) $20
C) $44
D) $64
E) $0
177) Discounting a product when the product does not sell at the original price is referred to as
A) an inverse markup.
B) a markdown.
C) price sensitivity.
D) concession pricing.
E) a rebate.
178) A markdown refers to
A) the difference between the final selling price and the retailer’s cost.
B) the amount the manufacturer adds to achieve the desired suggested retail price.
C) discounting a product when it does not sell at the original price and an adjustment is
necessary.
D) the lowest price to which a retailer can reduce a sales ticket and still make a profit.
E) the net margin.
179) Many retailers take a markdown as soon as sales fall to free valuable selling space and cash.
This illustrates one tactic for handling the ________ of markdowns.
A) timing
B) demand
C) availability
D) bargain hunting
E) customer value
180) When retailers set prices on new models or styles of products, the price of existing models
often is ________ to quickly sell them.
A) benchmarked
B) off-priced
C) value-added
D) marked down
E) maintained
181) To increase the demand for complementary products, the price of a product often is
A) marked up.
B) marked down.
C) off-priced.
D) value-subtracted.
E) maintained.
182) Markdowns can be used to
A) increase competition with other retailers in the immediate vicinity.
B) placate dissatisfied customers.
C) enhance customer perceptions of product quality.
D) increase demand for complementary products.
E) create a sense of urgency among repeat buyers.
183) Timing is an important element of markdowns. Those retailers who take a markdown as
soon as sales fall off most likely are doing so to
A) placate dissatisfied customers.
B) enhance customer perceptions of product quality.
C) free up valuable selling space and cash.
D) create an image as a cutting-edge retailer.
E) react to the entry of a new competitor.
184) The largest inventory of wedding dresses in the Southeast can be found at Low’s Bridal and
Formal in Brinkley, Arkansas. From December 26 to January 16, a prospective bride shopping at
Low’s can find gowns once priced at $6,000 for $2,999 and $800 gowns for $399. The reduced
prices of these gowns are reflected in which retail pricing strategy?
A) markdowns
B) original markups
C) future markups
D) inventory shrinkages
E) net markups
185) When Paulette first saw the dress in the store window, she knew two things. She had to own
the dress, and she could not afford it at its current price. Disappointed, she left. Two weeks later,
she passed by the store again and saw that the price of the dress had been reduced to one that she
could afford. Specifically, the store had reduced the price by 30 percent to “move” it. Paulette
was able to purchase the dress because of a(n)
A) negative markup.
B) markup elimination.
C) markdown.
D) liquidity reduction.
E) increase in net margin.
186) Recent research indicates that the timing of ________ might affect future sales because
frequent promotions increase consumers’ ability to remember regular prices.
A) seasonal markdowns
B) original markups
C) future markups
D) maintained markups
E) markdowns
187) Emphasizing consistently low prices and eliminating most markdowns is referred to as
A) low-margin pricing.
B) everyday low pricing.
C) everyday fair pricing.
D) value-based pricing.
E) maintained pricing.
188) As part of their regular retail pricing strategy, some retailers will emphasize consistently
low prices and eliminate most markdowns. This practice is referred to as
A) everyday low pricing.
B) low-margin pricing.
C) everyday fair pricing.
D) value-based pricing.
E) maintained pricing.
189) Walmart and The Home Depot emphasize consistently low prices and eliminate most
markdowns with a retail pricing strategy called
A) low-margin pricing.
B) value-based pricing.
C) everyday low pricing.
D) everyday fair pricing.
E) markdown pricing.
190) When considering the use of everyday low pricing, one should consider the impact on
________ because of EDLP’s potential to affect product quality assessments.
A) competitors’ promotional strategies
B) product benefits
C) convenience
D) maintained price
E) brand name and store image
191) Some retailers advocate a(n) ________ strategy, a pricing strategy that may not offer the
lowest prices but does try to create value for customers through service and the total buying
experience.
A) customer loyalty
B) value-emphasis
C) everyday low pricing
D) low-margin
E) everyday fair pricing
192) Retailers that advocate an everyday fair pricing strategy may not offer the lowest prices but
try to create value for customers using which of these?
A) customer service
B) product benefits
C) convenience
D) perceived quality
E) maintained price
193) Consumers often use the prices of ________ items, such as a can of Coke, to form an
overall impression of the store’s prices.
A) benchmark
B) stoplight
C) point-of-purchase
D) value-based
E) loss-leader
194) Which of the following statements regarding retail pricing is most accurate?
A) Consumers are unable to base their perceptions of a store’s prices on a price of a benchmark
item in the store.
B) Consumers are influenced more by a store’s ambience than its prices.
C) Stores that offer rebates with long processing times may create negative consumer
perceptions.
D) New technology has almost made shoplifting a thing of the past.
E) The only difference between everyday low pricing and everyday fair pricing is whether the
store uses markups.
195) Shrinkage in retailing refers to
A) the declining number of small privately owned retail stores due to economic hard times.
B) breakage, theft, and fraud by customers and employees.
C) the percentage of inventory that is damaged or unsalable because of product failure.
D) the loss of profits in clothing items that are returned because of inferior materials.
E) polycarbonate packaging that encases products with a tamper-resistant plastic seal.
196) While a large percentage of the losses from retail shrinkage come from shoplifting, an
almost equal amount is due to
A) employee theft.
B) insurance fraud.
C) deceptive advertising.
D) personnel training.
E) unredeemed rebates.
197) Off-price retailing refers to the
A) differences between the final selling price and the retailer’s cost.
B) sale of brand name merchandise at lower than regular prices.
C) sale of merchandise at maintained markups.
D) amount added by the manufacturer to achieve the desired suggested retail price.
E) reduction in retail price usually expressed as the gross margin.
198) The selling of brand name merchandise at lower than regular prices is referred to as
A) discount pricing.
B) everyday low price.
C) markdown pricing.
D) off-price retailing.
E) loss-price leader.