If a retailer buys a product for $30 and sells it for $50, what is the markup percentage, if
the markup is based on cost?
a. 33 percent
b. 40 percent
c. 67 percent
d. 80 percent
e. 100 percent
Site analysis begins by evaluating the:
a. traffic flow, land cost per square foot, and type of neighbor within the chosen market.
b. density of demand and supply of various areas within the chosen market.
c. demand density, site availability, and type of neighbors within a trading area.
d. type of neighbor, traffic flow, and demand density within a trading area.
e. demand density, supply density, and average sales per square feet.
All of the pub owners in a small college town met and decided to charge $7.99 for a
burger and beer during the school year. The pub owners may be in violation of the:
a. Wheeler-Lea Act.
b. Clayton Act.
c. Federal Trade Commission Act.
d. Sherman Antitrust Act.
e. Hart-Scott-Rodino Act.
A DVD player that was originally priced at $399.95 and cost $215 is ultimately sold for
$349.95. What were the reduction percentage and the maintained markup percentage on
this DVD player?
a. 14.3 percent; 38.6 percent
b. 12.5 percent; 38.6 percent
c. 38.6 percent; 12.5 percent
d. 15.1 percent; 38.6 percent
e. 46.2 percent; 12.5 percent
A(n) _____ occurs when retailers have their own products competing with the
manufacturer’s products for shelf space and control over display location.
a. category conflict
b. inventory shortage
c. open-to-buy
d. battle of the brands
e. vendor analysis
The _____ is the point where total revenues equal total expanses.
a. break-even point
b. matched point
c. stabilization point
d. profit maximization point
e. point of highest revenue
_____ occurs when the customer gets needed information in the store and then orders it
online for a lower price and to avoid paying state sales tax.
a. Channel Surfing
b. Same-store retailing
c. Bricks-and-mortar retailing
d. Social shopping
e. Outshopping
The retailer needs to design the receiving and handling area to minimize theft as this is
a high-theft area.
Visual communications in retailing have become especially important because:
a. retailers are making bigger investments in high-tech methods of communications.
b. customers are becoming increasingly sophisticated.
c. retailers have found it necessary to cut costs by reducing their sales staffs.
d. they provide better service than sales associates.
e. more and more people are functionally illiterate.
Which of the following is NOT a good guideline to follow when developing a
promotional campaign?
a. Try to utilize promotions that are consistent with your store image.
b. Review the success or failure of last year’s promotions before developing this year’s
promotions.
c. Remember that consumers always love a sweepstakes with a big grand prize; thus,
never use price promotions when a sweepstakes is available.
d. Use appeals that are of interest to your target market and that are realistic to obtain.
e. Make sure your objectives are measurable.
_____ include(s) age distributions, geographic trends, and ethnic makeup.
a. Population variables
b. Demographics
c. Target marketing
d. Micromarketing
e. Grey marketing
_____ is (are) the difference between net sales and cost of goods sold.
a. Gross margin
b. Gross sales
c. Operating profit
d. Net profit
e. Operating margin
When the seller is the only one selling a particular product, it is known as:
a. Pure competition
b. Pure monopoly
c. Monopolistic competition
d. Oligopolistic competition
e. Perfect competition
Which of the following is an example of a cash inflow?
a. Paying for merchandise
b. Rent expense
c. Utilities expense
d. Paying dividends
e. Sale of fixed assets
If the manager of the local barbeque restaurant has determined that the theoretical
number of consumers reached by its newspaper advertisement is 14,000 households,
then the manager is estimating the _____ of the medium.
a. frequency
b. reach
c. impact
d. awareness
e. coverage
The cost of a direct mail advertisement for Sam’s Self-Recording Studio was $1,200
and was sent to 9,000 households. Which of the following is the correct cost per
thousand (CPM)?
a. $0.13
b. $13.33
c. $133.33
d. $7.50
e. $75.00
_____occurs when a retail chain charges different prices in different geographic areas in
order to eliminate competition in those areas.
a. vertical price fixing
b. bait-and-switch pricing
c. palm-off pricing
d. horizontal price fixing
e. predatory pricing
A cash discount is quoted to a retailer as 3/10, net 60. This means that:
a. a discount of 3 percent can be earned if paid off in 10 installments over the next 60
days.
b. the retailer will get a 10 percent discount if the total is paid in 60 days.
c. a 3 percent discount will be granted to the retailer if the bill is paid in 10 days.
d. the bill is due in 60 days, but a discount of 3 percent to 10 percent can be earned for
paying it off sooner.
e. the total bill must be paid within 10 days.
Which of the following is not a step in the strategic planning process:
a. develop action plans.
b. perform a SWOT analysis.
c. define specific goals and objectives.
d. a well defined mission statement.
e. strategy development
Total planned sales for the spring-summer season for the Mort’s Discount Store are
$25,000,000. The planned monthly sales for March is 25 percent of total planned sales.
March’s planned sales are:
a. $2,500,000.
b. $6,250,000.
c. $12,500,000.
d. $15,625,000.
e. $18,750,000.
The supply chain, or channel, is affected by five external forces: consumer behavior, the
legal and ethical environment, the socioeconomic environment, the technological
environment, and:
a. the natural or physical environment.
b. competitive behavior.
c. personal relationships.
d. channel function management.
e. new government regulations.
It is necessary for retail firms to strive for high-profit performance results:
a. so that average operating results can be obtained even if planned results cannot be
accomplished.
b. as a means of achieving the largest profit possible.
c. a retailer need not strive for high profit performance results.
d. so that new retailer entrepreneurs cannot enter the market.
e. so that the managers can be allocated larger year-end bonuses.
_____ restrict the sale of certain products on Sundays.
a. Blue laws
b. Unfair trade practices
c. Fair trade laws
d. Sabbath codes
e. Shut out laws
A retailer has a net profit of $1,000,000, total assets of $12,000,000, a 2.5 asset turnover
ratio, and a net worth of $5,000,000. What is its financial leverage ratio?
a. .083 times
b. .500 times
c. 2.00 times
d. 2.40 times
e. 4.80 times
The cost method of inventory valuation is often used by retailers with big-ticket items
and a limited number of sales per day.
Trade discounts are typically given by manufacturers to retailers and wholesalers to
compensate them for performing certain services for the manufacturer.
Form reconfiguration deals with the time a retailer performs certain activities and offers
services.
The Index of Retail Saturation (IRS) is essentially the gross profit per square foot of
retail space in the marketplace for a particular line of retail trade.
Freestanding retailers generally experience lower rent than those operating in a central
business district.
A small decrease in converting nonpurchasing consumers into customers could increase
sales dramatically.
Generation Yers were the first to grow up with the Internet in its developed form.
The rate of change in retailing around the world appears to be directly related to the
stage and speed of economic development in the countries concerned.
Retailing is the largest industry in the country.