2004 MMS Exam and Key

Test 772
2004 DECA Ontario Provincials
MARKETING MANAGEMENT
1.
Which of the following is usually the last step in the buying process:
A. Placing the order
C. Deciding on goods
B. Selecting delivery method
D. Negotiating the price
2.
Which of the following is an action that a buyer should take in order to create a good working relationship with a vendor:
A. Sharing competitive information among vendors
B. Obtaining the vendor's agreement to cancel orders
C. Keeping shipments that contain more goods than ordered
D. Failing to report shipments that contain faulty products
3.
Customers who pay cash for goods and services often earn
A. coupons.
C. discounts.
B. receipts.
D. warranties.
4.
The information about profit in a business's profit-and-loss statement helps to establish the __________ of the business's
stock.
A. style
C. value
B. goals
D. brand
5.
Why is it important for a business to budget a certain amount of money to savings?

A. To satisfy customers
C. To pay stockholders
B. To avoid financial crisis
D. To prevent governmental control
6.
Businesses develop a quality culture by a combination of continual improvement and

A. teamwork.
C. research.
B. goodwill.
D. security.
7.
What type of technology does a business often use to communicate with its salespeople while they are traveling from
customer to customer?
A. Cellular phones
C. Fax machines
B. Data processing
D. Voice recognition
8.
When posting information on a web page, the hypertags you will use to mark paragraphs in your document are
A. and .
C. <para> and <para>.
B. and .
D. <startP> and <endP>.
9.
Which of the following usually reduces the amount of the premium that a business pays for insurance:
A. Negotiating a security deposit of $2,000
B. Purchasing insurance from a private agent
C. Paying the premium in monthly installments
D. Increasing the deductible from $500 to $1,000
10.
Which of the following demonstrates a good security practice:

A. Noelle chats with customers while ringing up sales.
B. Tom checks the amount and date on all personal checks.
C. Kelsey keeps her purse on a shelf underneath the register.
D. Jane leaves with the bank deposit at the same time each day.
11.
Employing guards and training employees to detect and report shoplifting are examples of a business's __________
measures.
A. marketing plan
C. competitive
B. loss prevention
D. inventory control
12.
Which of the following is a way that local zoning laws affect businesses:
A. Require labels on products
C. Limit creation of monopolies
B. Prohibit price discrimination
D. Restrict placement of billboards
Test 772
13.
Determine the assets of a business given the following information: cash = $3,000, accounts receivable = $5,500,
inventory = $10,050, and fixed assets = $8,100.
A. $16,600
C. $23,650
B. $21,150
D. $26,650
14.
To persuade employees to perform in a certain way, managers should appeal to the employees'
A. needs.
C. goals.
B. wants.
D. desires.
15.
A frequently used method of teaching individual employees how to perform specific job tasks is known as
A. on-the-job training.
C. role-playing.
B. classroom instruction.
D. employee orientation.
16.
Which of the following is confidential information that would be unethical for an employee to provide to others without
permission from the business:
A. Posting of available positions
C. Well-publicized expansion plans
B. List of employees who will be promoted D.
Dates of an upcoming special sale
17.
A good way to make numerical facts in a complex written report easy for readers to grasp is to present the facts in a(n)
__________ format.
A. illustrated
C. separate
B. descriptive
D. technical
18.
A facility that simply holds goods until they are needed and is owned and operated by the business that uses it is called a
A. public storage warehouse.
C. private storage warehouse.
B. public distribution center.
D. private distribution center.
19.
Exclusive dealing is considered illegal in all of the following except if the

A. sales revenue involved is sizable.
B. exclusive arrangement is violated; then shipments are cut off.
C. manufacturer is much larger and more intimidating than the dealer.
D. exclusive deal blocks competitors from as much as 10% of the market.
20.
A supplier prepares an invoice with terms of 3/10, net 30 on an order of four items at $178.50 each. What is the total due if
the customer takes the discount?
A. $642.60
C. $708.63
B. $692.58
D. $714.50
21.
A business that deals with fragile or perishable goods should consider using __________ storage facilities.
A. special
C. ground
B. standard
D. general
22.
What is a business doing when it makes sure a sufficient supply of advertised items is available for a special sale?
A. Arranging a method of transportation
C. Communicating information about a product
B. Developing a relationship with a vendor D.
Coordinating distribution with promotion
23.
Successful channel member evaluations are often conducted on the basis of

A. performance standards.
C. performance bonds.
B. personal relationships.
D. international competitiveness.
24.
What type of utility is created when ownership of a product is transferred from the seller to the buyer?
A. Time
C. Form
B. Possession
D. Place
25.
Which of the following is considered the primary incentive for starting a business:
A. Profit motive
C. Competition
B. Supply and demand
D. Private property
26.
When management and union leaders negotiate but cannot reach an agreement, either one may call for a(n)
A. injunction.
C. arbitrator.
B. grievance.
D. probation.
Test 772
27.
The Consumer Price Index is often used to measure

A. inflation.
C. competition.
B. production.
D. distribution.
28.
Which of the following has an impact on trade balances:

A. Standards of living
C. Domestic investments
B. Cultural events of nations
D. Trends in the world economy
29.
What do many customers use when buying products that allow businesses to receive payment quickly through electronic
transfer?
A. Debit cards
C. PIN numbers
B. Personal checks
D. Credit vouchers
30.
Mr. and Mrs. Smith are planning to purchase a new, 24-foot, camper trailer. Which of the following types of credit would be
best for the Smiths if they now have less than half the purchase price:
A. Open credit
C. Regular credit
B. Revolving credit
D. Installment credit
31.
Trade credit is a form of short-term financing for many businesses because it allows them to
A. qualify for higher trade discounts.
C. use their credit rating to obtain a cash loan.
B. borrow cash without paying interest.
D. obtain goods for resale and pay for them later.
32.
When trying to raise capital, an existing business that is owed a large amount of money as accounts receivable may turn
them into cash by selling them to a(n)
A. factor.
C. friend.
B. creditor.
D. investor.
33.
The gathering of data needed to handle a specific marketing problem or situation is known as
A. marketing strategy.
C. marketing research.
B. information processing.
D. information reporting.
34.
Which of the following is an example of an unethical method of collecting marketing information:

A. Interviewing randomly selected participants
B. Contacting customers in a single geographic area
C. Calling a wide variety of consumers at home with survey questions
D. Surveying a limited group of similar respondents to represent a broader universe
35.
Why do many businesses use computer technology to manage marketing information?

A. To send direct-mail pieces to customers C.
To merge a variety of data into one database
B. To prepare informational questionnaires D.
To develop software that fits a specific need
36.
A business's personnel needs are ultimately determined by the company's

A. purchases.
C. sales.
B. promotional strategy.
D. financial plan.
37.
Which of the following is an example of secondary data that is available through the Internet:
A. Digital dossiers
C. Personal surveys
B. Trade association publications
D. Syndicated services
38.
What type of internal record might provide a business with marketing information about the competition and changes in the
marketplace?
A. Sales activity reports
C. Customer comment cards
B. Accounts receivable reports
D. Employee performance reviews
39.
Why do businesses use exploratory research?

A. To predict future sales outcomes
B. To define the reason for the research
C. To try out different approaches to see what the results would be
D. To obtain specific information related to the business's situation
40.
Which of the following must coincide when using descriptive statistics in order to have normally distributed data:
A. Mean, median, mode
C. Range, dispersion, confidence interval
B. Ordinal, nominal, binomial
D. Standard deviation, percentiles, pictorial representations
Test 772
41.
One of the main portions of a marketing report describes the data collection procedures and the
A. writing styles.
C. preliminary costs.
B. research methods.
D. local regulations.
42.
Liza has always wanted a horse, and she has finally saved enough money to buy one. In marketing terms, Liza is a
A. market.
C. target group.
B. resource.
D. market segment.
43.
Which of the following do businesses use to identify developing changes so that they can make adjustments to remain
competitive:
A. Geographic monitoring
C. Demographic segmenting
B. Environmental scanning
D. Psychological profiling
44.
An important tool used in forecasting sales is the business's

A. past sales.
C. credit terms.
B. profit margin.
D. planned purchases.
45.
What is the major reason that people lose their jobs?

A. They lack technical knowledge.
B. They are unable to communicate.
C. They cannot carry out job tasks.

D. They are unable to get along with others.
46.
As employees go about their daily activities, their actions should be driven by whether the actions will
A. be witnessed by customers.
C. benefit the business.
B. result in additional sales.
D. result in customer satisfaction.
47.
Businesses should view negotiation as a way to

A. get something done.
B. build strong relationships.
C. get the action they want.

D. keep negative people quiet.
48.
The number of people who are supervised by an individual is called

A. accountability.
C. unity of command.
B. span of control.
D. line-and-staff organization.
49.
Brown's Department Store has determined that full-time salespeople in the men's department should achieve sales of
$146 per hour. This is an example of a(n) __________ job standard.
A. qualitative
C. specific
B. attitudinal
D. quantitative
50.
The main advantage of external recruiting of employees over internal recruiting is that it
A. is less expensive.
C. retains good employees.
B. encourages employees to seek promotions.
D. brings in more applicants.
51.
Which of the following is a benefit of hiring the right employee for a job:
A. Increased employee turnover
C. Decreased employee morale
B. Increased risk of poor job performance
D. Decreased cost of selection
52.
Which of the following is a reason for presenting an overview of the company to new employees:
A. It helps them feel a part of the company.
C. It gives them a detailed explanation of their jobs.
B. It lets them know what is expected of them.
D. It provides them with specific product
information.
53.
The difference between management and leadership is that

A. management is a way of doing things.
B. leadership is a style or way of performing.
C. management and leadership are the same thing.
D. leadership is the process of getting things done.
54.
The premise that a satisfied need does not motivate is most associated with
A. Equity Theory.
C. Maslow's Hierarchy of Needs.
B. Expectancy Theory.
D. Herzberg's Two-Factor Theory.
Test 772
55.
Which of the following is a beginning step to take in handling an employee complaint:

A. Consider all possible solutions
B. Document the resolution to the complaint
C. Identify the problem behind the complaint
D. Use personal judgment in analyzing the situation
56.
In order to maintain supplies at the appropriate level to meet needs, businesses need to know the
A. final cost.
C. prime rate.
B. reorder point.
D. contract price.
57.
Which of the following types of budgets do most businesses prepare first:

A. Sales
C. Cash
B. Income
D. Capital
58.
Given the following information from a profit-and-loss statement, determine the gross margin percentage:
Net sales: $80,000
Net profit: $5,000
Cost of goods sold: $45,000
A. 37 1/2%
B. 43 3/4%
C. 56 1/4%
D. 62 1/2%
59.
Managers use the broad objectives they develop for a business as the basis for setting
A. benefit levels.
C. salary ranges.
B. performance targets.
D. recruitment quotas.
60.
A business manager who wants to uncover all of the hidden aspects of a problem in order to find a solution might use the
__________ technique.
A. redefine
C. who-said
B. sleep-on-it
D. what if. . .
61.
Which of the following would not be scheduled on a daily "To Do" list:
A. Activities that must be done next month
B. Required activities from the master list
C. New activities that must be completed the next day
D. Activities that were previously scheduled for the day
62.
Which of the following often determines trade association dues:

A. Age of business
C. Business ownership
B. Business location
D. Number of employees
63.
To set prices, businesses must price the physical product and all of its associated
A. features.
C. values.
B. services.
D. benefits.
64.
Which of the following is a procedure developed by advances in technology that many businesses are using to attach
prices to products:
A. Digital processing
C. Electronic marking
B. Optical scanning
D. Magnetic transferring
65.
The amount that a seller charges for a good or a service is known as

A. cost of goods.
C. profit.
B. selling price.
D. cash flow.
66.
A seasonal discount entitles a business to a 15% reduction in the price of holiday decorations. What would be the final
cost to the business for an order of holiday items priced at $1,200?
A. $995
C. $1,047
B. $1,020
D. $1,195
67.
A trade discount is a
A. reduction off the list price.
B. discount allowed for returned goods.
C. promotional allowance.
D. price offered to customers.
Test 772
68.
What is an important step that businesses must take in order to set the prices of goods or services?
A. Obtain credit reports
C. Review advertising data
B. Gather cost information
D. Analyze marketing plans
69.
When the Pepsi company first introduced Diet Mountain Dew, the product was only available in one specific area. This is
an example of
A. concept testing.
C. test marketing.
B. product development.
D. product screening.
70.
During which of the following stages in a product's life cycle can businesses expect to earn significant profits:
A. Decline
C. Growth
B. Introduction
D. Maturity
71.
What has become the major purpose of product packaging?

A. To protect products from breakage
C. To protect products and consumers
B. To secure the contents of the package
D. To decrease the extent of product usage
72.
Which of the following is an illustration of increasing the breadth of a company's product mix:
A. A pizza carryout added Italian entrees to its pizza menu.
B. A department store opened a branch in a suburb of Toronto.
C. A chain of automotive stores dropped its line of CB radios.
D. A bank increased its hours of customer service on weekends.
73.
Businesses benefit from repeat sales to consumers who have brand

A. loyalty.
C. resistance.
B. experience.
D. objections.
74.
The most successful brands are based on a

A. business's perspective.
B. low level of expectations.
C. clear set of values.

D. single method for connecting with customers.
Promotion benefits customers by helping them to

A. spend more on products.
B. identify buying motives.
C. postpone buying decisions.

D. select appropriate products.
75.
76.
What form of promotion is generally emphasized for products sold to industrial consumers?
A. Advertising
C. Publicity
B. Sales promotion
D. Personal selling
77.
Advertisers should not make exaggerated claims for a product when advertising to young children because
A. children won't believe the claims.
B. exaggerated claims lose credibility for the product.
C. young children have a limited ability to evaluate information.
D. children do not understand the number of details given about the product.
78.
Your partner has designed a sharp, distinctive graphic logo for your business's ad and wants you to develop a catchy
phrase to use with the logo. What will you be creating?
A. Copy
C. Slogan
B. Headline
D. Illustration
79.
When evaluating print ad copy, which of the following does not need to be part of your assessment:
A. Check the facts in the copy for accuracy.
B. Check for anything that might cause legal problems.
C. Make sure the copy includes as many clichs as possible.
D. Proofread the copy for errors in spelling, grammar, and punctuation.
80.
A hospital has decided to campaign heavily this summer to try to get more people to donate blood. Since the hospital
wants the advertising to be highly visible to healthy, active people, the most cost-effective type of advertising would be
A. direct mail.
C. national magazines.
B. television spots.
D. outdoor and transit media.
Test 772
81.
The Bedford Company wants to measure the effectiveness of a television commercial it recently ran. Which of the
following would the Bedford Company be most likely to use:
A. Recall test
C. Market test
B. Portfolio test
D. Recognition test
82.
Which of the following types of information about a business are customers most likely to believe:
A. News releases
C. Direct mail
B. Paid advertising
D. Telemarketing
83.
One of the purposes of using contests or games to promote a business is that this kind of specialty promotion
A. is not regulated by any laws.
C. attracts attention and creates excitement.
B. involves little or no expense.
D. is likely to create positive public attitudes.
84.
Businesses should base the objectives of a promotional plan on the information obtained from
A. vendor surveys.
C. budget analysts.
B. market research.
D. local publicity.
85.
Which of the following is the best example of the coordination of promotional activities:
A. Advertising an upcoming sale a week ahead of time
B. Using personal selling to earn a sales commission
C. Obtaining publicity for the firm's new product line
D. Sending out samples of a new product that is on display
86.
Which of the following is an example of cooperative advertising:

A. Texaco's offer of a 10% senior citizens' discount on Tuesdays
B. A Petro-Canada station's coupon for free glasses with a gasoline fill-up
C. Shell Oil Company's paying 50% of the cost of a Shell station's promotion
D. A BP station's advertising a free quart of oil with the purchase of three
87.
Locating potential clients is referred to as

A. follow-up.
B. prospecting.
C. a service attitude.
D. a sales presentation.
88.
Salespeople who give expensive gifts to customers in an attempt to obtain their business are often considered guilty of
A. unethical behavior.
C. accepting bribes.
B. overstating expenses.
D. violating local laws.
89.
A representative for a weight-loss program might be required to meet with at least 25 clients per week. This is an example
of a(n) __________ quota.
A. profit
C. activity
B. financial
D. expense/budget
90.
When a salesperson explains to a customer that a product is safe for all age groups to use, the salesperson is pointing out
a(n) __________ benefit.
A. obvious
C. costly
B. exclusive
D. hidden
91.
In precall planning, the salesperson focuses on learning more about the

A. business.
C. product.
B. territory.
D. customer.
92.
What usually affects a customer's overall decision to buy?

A. Desire for bargains
C. Desire for quality
B. Salesperson's commission
D. Customer personality
93.
Identify the factor affecting needs and wants in the following situation: For his birthday, Jonathan wanted a tricycle,
coloring books, and toy soldiers.
A. Jonathan's age level
C. The time of year
B. Jonathan's place of residence
D. Current economic conditions
Test 772
94.
In a sales situation, which of the following is an example of an information-gathering probe:

A. "Do you understand how to insert the diskettes?"
B. "For what purposes will you be using your computer?"
C. "Would you like me to demonstrate that program again?"
D. "This printer has an excellent print quality, doesn't it?"
95.
Which of the following methods of handling objections is most likely to offend the customer:
A. Inquiry method
C. Deny-it method
B. Yes, but . . . method
D. Show 'em method
96.
Determine whether the following statement is true or false: It is only appropriate to follow up with a client after a successful
sales close.
A. True, if a client turns you down, s/he should be removed from your active file.
B. False, it is not essential to follow up with a client after a successful sales close.
C. True, follow-up after an unsuccessful sales presentation will only cause further frustration.
D. False, appropriate follow-up after an unsuccessful sales presentation may lead to future sales.
97.
What is the total amount owed by a customer for a purchase of $72.50 if the sales tax rate is 4%?
A. $70.40
C. $80.40
B. $75.40
D. $85.40
98.
Dave sells life insurance. At each sales presentation, he asks for the names of friends or relatives who might be
interested in his products. Dave is using the __________ method of prospecting.
A. endless-chain
C. bird-dog
B. personal-observation
D. center-of-influence
99.
A business assigned one salesperson to each territory and projected total company sales to be $2,450,000 for the month.
Based on the following statistics in a sales report, which territory achieved its projected percentage of total sales:
Territory A
23% of sales
Sold $562,000
Territory B
20% of sales
Sold $491,000
Territory C
28% of sales
Sold $675,000
Territory D
29% of sales
Sold $708,000
A. Territory A
B. Territory B
C. Territory C
D. Territory D
Test 772
KEY
100. Which of the following instructional methods is considered the most effective way to teach selling skills in a classroom
setting:
A. Lectures
C. Case studies
B. Role-playing
D. Programmed instruction
1.
A
Placing the order. Placing the order cannot take place until all the decisions have been made about what to buy, from
whom, and for what price. Selecting the method of delivery, deciding on the goods, and negotiat-ing the price are steps in
the buying process that occur before an order is placed.
SOURCE: BA:007
SOURCE: p. 422, Marketing Essentials. Farese, L.S.; Kimbrell, G.; Woloszyk, C.A., Glencoe McGraw-Hill, 3rd ed.,
2002.
2.
B
Obtaining the vendor's agreement to cancel orders. Canceling an order causes additional work for a vendor and should be
avoided if possible. If there is a good reason to cancel, the buyer should discuss it with the vendor and obtain the vendor's
agreement to the cancellation. Two acceptable reasons for returning items to vendors are shipments containing faulty
products and shipments containing larger quantities than requested. In addition, keeping faulty goods or excess amounts
would cause problems for the buyer and damage the buyer/vendor relationship. Buyers should not pass on competitive
information from one vendor to another.
SOURCE: BA:008
SOURCE: pp. 513-514, Small Business Management: An Entrepreneurial Emphasis. Longenecker, J.G.; Moore, C.W.;
Petty, J.W., Thomson/South-Western, 12th ed., 2003.
3.
C
Discounts. A discount is the amount by which the original price of goods and services is reduced. Many businesses offer
discounts to customers who pay in cash rather than with credit cards. A receipt is a written statement that money has been
received for the purchase of goods or services. A coupon is a printed form offering money off the purchase of a specified
item. A warranty is a promise made by the seller to the con-sumer that the seller will repair or replace a product that does
not perform as expected.
SOURCE: BA:015
SOURCE: MA LAP 53--Calculating Net Sales
4.
C
Value. The value of a business's stock depends on how much profit the business has been able to make over time and the
potential of the business to continue making profit. Investors usually are willing to pay more for stock in a business that is
earning a significant profit. When investors pay higher prices for stock, the value of the stock increases. Stock is an
inanimate object and does not have style or distinguishing features. Goals are objectives. Stock is not identified by brand
but by a symbol that designates its name on the stock market.
SOURCE: BA:020
SOURCE: MN LAP 61--Profit-and-Loss Statements
5.
B
To avoid financial crisis. Budgets are vital in preparing for financial crisis. With a budget, a business can plan for savings
so that bills get paid even when planned sales goals aren't met. The money budgeted to savings can be used to pay
expenses and help avoid a financial crisis. Businesses do not budget money to savings in order to pay stockholders,
prevent governmental control, or satisfy customers.
SOURCE: BA:024
SOURCE: MN LAP 59--Nature of Budgets
6.
A
Teamwork. Teamwork is a cooperative effort of two or more people working together to reach a common goal. Teamwork
is important to business success. When employees work together and with the business to improve themselves and the
products of the business, the result is usually quality. The combination of continual improvement and teamwork creates
quality products, a quality atmosphere in the business, and quality service for the customers. Businesses that have a
quality culture often develop goodwill with the community and customers. Research and security may contribute to
improvement, but teamwork is also needed to develop a quality culture.
SOURCE: BA:025
SOURCE: p. 9, Business Principles and Management. Everard, K.; Burrow, J., South-Western, 11th ed., 2001.
7.
A
Cellular phones. Many businesses provide their outside salespeople with cellular phones, which enables the business to
communicate with salespeople when they are traveling. The benefit of using cell phones is that salespeople can call in
Test 772
8.
KEY
orders from distant locations or receive important information from the business that will help them in selling to customers.
Data processing gathers and analyzes information but does not com-municate with salespeople while they are traveling.
Fax machines are not widely used to communicate with salespeople while they are traveling from one customer to another,
although a business might fax information to a salespersons hotel. Voice recognition is a feature of some cell phones.
SOURCE: BA:030
2002.
B
 and . The hypertag tells the browser to begin a new paragraph and tells it to end that paragraph.
Notice there is a difference; the end symbol includes a slash mark. Both markings are neces-sary if the browser is to work
correctly on the page. Using twice simply repeats the new paragraph hypertag. The symbols <startP> and <endP>,
and <para> and <para> are not hypertags.
SOURCE: BA:217
SOURCE: National Center for Supercomputing Applications (NCSA). (n.d.). A Beginner's Guide to HTML. Retrieved
August 5, 2003, from http://archive.ncsa.uiuc.edu/General/Internet/WWW/ HTMLPrimerAll.html#PA
9.
D
Increasing the deductible from $500 to $1,000. The deductible is the amount of loss that a business is will-ing to accept
before the insurance company pays the remainder. As a rule, the premium becomes smaller as the deductible becomes
larger. For example, the premium costs for a business with a $1,000 deductible will be less than for a business with a
$500 deductible because the first business is willing to pay for more of the loss. Paying the premium in monthly
installments and purchasing the insurance from a private agent will not reduce the amount of the premium. Businesses do
not pay a security deposit when they buy insurance.
SOURCE: BA:039
SOURCE: p. 497, Business Principles and Management. Everard, K.; Burrow, J., South-Western, 11th ed., 2001.
10.
B
Tom checks the amount and date on all personal checks. Checks should be filled out completely with accurate amounts
and dates; the signature should match that on another piece of identification such as a driver's license; and information
from the backup identification should be recorded on the check. The times and routes for bank deposits should vary to
deter a robber. Chatting with customers is a distraction that can cause errors and promote point-of-sale fraud. Many
businesses do not permit personal belongings at the work station to reduce the chance of employee theft.
SOURCE: BA:041
SOURCE: RM LAP 4--Security Precautions
11.
B
Loss prevention. Efforts to prevent losses to the business by careful, advance planning are forms of loss prevention.
Other such measures include bonding employees who handle valuables and eliminating safety hazards. A marketing plan
is a set of procedures or strategies for attracting the target customer to a busi-ness. Competitive measures include all the
techniques used by a business in order to attract customers away from competing businesses. Inventory control is
tracking the amount, the kind, and the value of inven-tory that a business has on hand.
SOURCE: BA:052
SOURCE: BA LAP 2--Risk Management
12.
D
Restrict placement of billboards. Local zoning laws affect businesses in a variety of ways such as restricting the
placement of billboards. Local communities have the right to regulate where businesses can locate, the physical
appearance of the building, and the type of signage that can be used. Communities can also decide if billboards are
allowed and where they can be placed. Businesses that want to use billboards to advertise must follow the zoning laws of
the community. Zoning laws do not require labels on products, prohibit price discrimination, or limit the creation of
monopolies.
SOURCE: BA:053
SOURCE: pp. 34-35, Marketing: Creating Value for Customers. Churchill, G.A.; Peter, J.P., Irwin/McGraw-Hill, 2nd ed.,
1998.
13.
D
$26,650. The assets of a business include all of the factors mentioned, so the assets would be the sum of these four
figures. Cash includes money in a cash register, cash box, or bank account. Accounts receivable are monies owed to a
business by customers who buy products on credit. Inventory is all the stock that a business has on hand. Fixed assets
are permanent assets used in the operation of a business such as land, buildings, and equipment.
SOURCE: BA:014
SOURCE: MB LAP 9--Nature of Accounting
Test 772
KEY
Test 772
KEY
14.
A
Needs. A need is something required or essential that is lacking. Managers should identify and appeal to employees'
needs when persuading them to perform in a certain way. For example, if a manager wants to transfer an employee to
another location, the manager should identify what need will persuade the employee to accept the transfer. The need may
be basic such as more money to support the family, or the need may be to be promoted and recognized as an achiever.
Managers are more likely to successfully persuade employees if they appeal to their needs. Wants are desires that may or
may not be required. Goals are objective to achieve.
SOURCE: CO:024
SOURCE: pp. 324-325, Communicating for Success. Hyden, J.S.; Jordan, A.K.; Steinauer, M.H.;
Jones, M.J., South-Western Educational Publishing, 2nd ed., 1999.
15.
A
On-the-job training. Businesses frequently use on-the-job training to teach employees how to perform their jobs.
On-the-job training involves having the new employee work with a more experienced employee in the real job
situation to learn the various job tasks by actually doing them. Classroom instruction and role-playing are methods of
teaching groups of employees how to perform their jobs. Employee orientation is the overall process of acquainting
new employees with the business.
SOURCE: CO:139
Test 772
SOURCE:
KEY
pp. 235-236, Retailing. Lewison, D.M., Prentice-Hall, 6th ed., 1997.
16.
B
List of employees who will be promoted. Certain information is considered confidential, and businesses expect employees
who have access to that information to keep it private. For example, information about planned promotions is confidential
and should not be divulged until the business is ready to make the announcement. If an employee has access to this
information or learns this information ahead of time, it would be unethical to tell others. Available positions, dates of an
upcoming sale, and well-publicized expan-sion plans are not examples of confidential information.
SOURCE: CO:043
SOURCE: pp. 185-186, Succeeding in the World of Work: Teacher's Wraparound Edition. Kimbrell, G.; Vineyard, B.S.,
Glencoe/McGraw-Hill, 6th ed., 1998.
17.
A
Illustrated. Graphs, charts, tables, and other kinds of illustrations are good ways to present numerical data in a written
report because they make the data easy to see at a glance. When numerical data are described within the text, they may
be overlooked or their significance may not be as readily apparent as when they are illustrated. Numerical facts that
support the report should generally be included at the appropriate place within the text, not in a separate format.
Presenting data in a technical or symbolic format may make them more difficult to understand.
SOURCE: CO:009
SOURCE: pp. 458-459, Business and Administrative Communication. Locker, K.O., Irwin/McGraw-Hill, 5th ed., 2000.
18.
C
Private storage warehouse. A private storage warehouse simply holds a business's goods in a safe location until they are
required. A private distribution center is a warehouse that holds goods, fills and distributes orders, and is owned by the
business that uses it. A public storage warehouse holds goods but is owned by a company that is in the business of
renting storage space to other businesses. Distribution centers are generally privately owned.
SOURCE: DS:001
SOURCE: DS LAP 1--Distribution
19.
B
Exclusive arrangement is violated; then shipments are cut off. Typically, exclusive dealing provides con-siderable market
protection for manufacturers. As long as they do not block 10% or more of the competitors, the sales revenues are small,
and the manufacturer is not using its size to intimidateexclusive dealing is legal. Manufacturers are free to cut off
shipments if the dealer violates the exclusive arrangement.
SOURCE: DS:058
SOURCE: pp. 366-367, Marketing: Concepts and Strategies (2000e). Pride, W.M.; Ferrell, O.C., Houghton Mifflin, 2000.
Test 772
KEY
20.
B
$692.58. Invoices list the quantity of items purchased, unit price, and terms that indicate when payment is expected. In
this situation, there are four items at $178.50 each for a total of $714 ($178.50 x 4 = $714). The terms are 3/10, net 30,
which means the customer may take a 3% discount if the invoice is paid within 10 days of the invoice date. To calculate
the discount, multiply the net amount by 3% ($714 x 3% or .03 = $21.42). Subtract this figure from the net amount to
calculate the total after discount ($714.00 $21.42 = $692.58).
SOURCE: DS:030
SOURCE: pp. 72-73, Marketing and Essential Math Skills: Teacher's Edition. Stull, W.A., South-Western Educational
Publishing, 1999.
21.
A
Special. There are several types of special storage facilities that are capable of effectively storing fragile or
perishable goods. Some of these facilities provide refrigeration or controlled environments that prolong the life of
fragile or perishable goods. Standard, general, and ground storage facilities are designed to store goods that do not
need special handling.
SOURCE: DS:013
Test 772
SOURCE:
KEY
pp. 274-275, Fundamentals of Logistics Management. Lambert, D.M.; Stock, J.R.;
Ellram, L.M., Irwin/McGraw-Hill, 1998.
22.
D
Coordinating distribution with promotion. Businesses coordinate distribution with their promotional activities to make sure
that sufficient quantities of items are available when they are advertised for sale. If a business plans to promote a certain
item or offer it at a special sale, the business must make sure that an adequate supply will be on hand to meet consumer
demand. Businesses may lose customers if they advertise items that are not available because they failed to make the
necessary distribution plans. A business is not arrang-ing a method of transportation, developing a relationship with a
vendor, or communicating information about a product when it makes sure a sufficient supply of items is available for sale.
SOURCE: DS:048
SOURCE: pp. 431-432, Marketing. Evans, J.R.; Berman, B., Prentice-Hall, 7th ed., 1997.
23.
A
Performance standards. Performance standards, or another form of rating system, provide a benchmark for measuring the
qualifications/performance of a channel member. The standards also provide a means for those same channel members
to compare their performance to others. Personal relationships are not an effective way to evaluate channel members. A
performance bond is a risk-management measure taken to insure completion of a contract. International competitiveness
is an example of a performance standard to be measured.
SOURCE: DS:051
SOURCE: pp. 354-355, Marketing Management. Czinkota, M.R.; Kotabe, M., South-Western Publishing Co., 2nd ed.,
2001.
24.
B
Possession. Possession utility is usefulness created when ownership of a product is transferred from the seller to the user.
In other words, a product must be purchased before it can have possession utility. Time utility is created when the product
is available when it is needed, place utility occurs when products are available where they are needed, and form utility
occurs when the shape of a product is altered or changed to make it more useful to consumers.
SOURCE: EC:004
SOURCE: EC LAP 13--Utility
25.
A
Profit motive. The profit motive is the hope of making a profit that serves as an incentive for individuals to assume risks
involved in investing in business. It is a goal toward which an individual or a business can work. Competition is the rivalry
among two or more businesses to attract scarce customer dollars. Private property is anything of value that is owned by
an individual or a business. Supply and demand work together to determine prices.
SOURCE: EC:010
SOURCE: EC LAP 2--Profit
26.
Test 772
KEY
Arbitrator. Sometimes management and union leaders cannot reach an agreement. When this occurs, either side
may call in an arbitrator, a person who will make decisions concerning the final contract. If arbitration is called for,
the decision is final and cannot be changed by the union or by management. An injunction is a court order forbidding
someone from carrying out an act, such as picketing. A grievance is a disagreement between workers and
employers. Probation is the time frame in which an employee is tested on the job.
SOURCE: EC:015
SOURCE:
EC LAP 5--Organized Labor
Test 772
27.
KEY
Test 772
KEY
Inflation. Inflation is a rapid rise in prices that may occur when demand exceeds supply or when productivity declines and
costs of labor go up. One tool that economists use to measure inflation is the Consumer Price Index, the average range of
prices for a variety of items frequently purchased by urban households. These average prices are then compared to the
average prices for the base years of 1982-84. The percentage of increase in prices indicates the rate of inflation.
Production is the creation of goods and services from economic resources. Competition is rivalry between two or more
businesses to attract customer dollars. In economics, distribution is the process or activity by which income is divided
among resource owners and producers.
SOURCE: EC:044
SOURCE: pp. 450-452, Economics. Wilson, J.H.; Clark, J.R., South-Western Educational Publishing, 1997.
28.
Test 772
KEY
Trends in the world economy. Trade balances are affected by trends in the world economy. A nation exper-iencing
economic growth impacts on other nations by increasing its level of exports. A nation experiencing economic loss
might be unable to purchase goods and services from other nations, or to produce goods to export. Standards of
living, cultural events of nations, and domestic investments do not impact on trade balances.
Test 772
SOURCE:
SOURCE:
KEY
EC:016
EC LAP 4--International Trade
29.
A
Debit cards. Debit cards are similar to credit cards except they access funds in a customer's checking or savings account.
When a customer pays with a debit card, funds are transferred electronically to the business's bank account. The benefit
to the business is that the funds are transferred quickly so that the business doesn't need to wait for personal checks to
clear or for payments from credit-card companies in order to actually receive the money. Some debit cards require the use
of PIN numbers. Credit voucher is a way of returning money to a customer.
SOURCE: FI:038
SOURCE: pp. 567-568, Introduction to Business: Our Business and Economic World: Teacher's Wraparound Edition.
Brown, B.J.; Clow, J.E., Glencoe/McGraw-Hill, 1997.
30.
D
Installment credit. Installment credit is a type of credit account set up to handle one total amount of credit that is to be paid
off in regular installments. It is commonly used to purchase large, expensive items. Revolving credit is a type of credit
account that limits the total amount of money that may be owed and charges interest on outstanding balances. Open or
regular credit allows credit users to buy at any time during a set period, usually 30 days.
SOURCE: FI:002
SOURCE: FI LAP 2--Credit and Its Importance
31.
D
Obtain goods for resale and pay for them later. Trade credit is issued by suppliers when they allow busi-nesses to obtain
goods for resale without paying for them at the time of delivery. This is the equivalent of short-term financing since the
businesses do not have to use their cash on hand or borrow cash to pay for the goods. Often, the businesses use the
profit from selling the goods to pay the supplier. Trade credit does not govern the percent of trade discount offered since
trade discounts are given to purchasers who perform certain marketing activities. No cash is loaned through trade credit.
SOURCE: FI:023
SOURCE: p. 394, Marketing. Burrow, J., South-Western, 2002.
32.
A
Factor. A factor is a finance company or bank that will pay cash for the accounts receivable of a firm for a charge of 1/2 to
2 3/4 percent of the outstanding accounts. The factor may also assume responsibility for collecting the accounts
receivable. Businesses usually do not raise capital by selling accounts receivable to friends, creditors, or investors.
SOURCE: FI:031
SOURCE: pp. 505-506, Marketing Practices and Principles. Mason, R.E.; Rath, P.M.; Husted, S.W.; Lynch, R.L.,
Glencoe, Macmillan/McGraw-Hill School Publishing Co., 5th ed., 1995.
33.
C
Marketing research. Marketing research is the systematic gathering, recording, and analyzing of data about a specific
issue, situation, or concern. Some situations call for more specific data than are generated by the marketing-information
management system; therefore, marketing research is needed. Marketing strategy is a plan of action for achieving
marketing goals and objectives. Information reporting is a function of a marketing-information management system that
involves the distribution of information to those who make marketing decisions. Information processing is the function of a
marketing-information management system that involves examining data and putting them in useful formats.
SOURCE: IM:001
SOURCE:
IM LAP 2--Marketing-Information Management
Test 772
KEY
34.
D
Surveying a limited group of similar respondents to represent a broader universe. It is considered unethical to obtain
marketing information from only a limited group of people who have the same opinions because the results of the survey
will be biased. A few researchers collect information in this manner in order to sub-stantiate a predetermined point of view.
This method is unethical because it is not legitimate research but an attempt to use the predisposed opinions of a few
people to support a broad claim. Most researchers survey a broad range of respondents in order to obtain a variety of
opinions. Calling a wide variety of consumers, interviewing randomly selected participants, and contacting customers in a
single geographic area are ethical methods of collecting marketing information.
SOURCE: IM:025
SOURCE: pp. 132-133, Marketing: An Introduction. Kotler, P.; Armstrong, G., Prentice-Hall, 4th ed., 1997.
35.
C
To merge a variety of data into one database. Businesses often obtain information about customers from a variety of
sources such as questionnaires, warranty cards, or sweepstakes entries. All of this information is valuable if the
businesses are able to merge it into a database that is easily accessible. A business's cus-tomer database might include
information about name, address, types of recent purchases, dollar amounts spent, general interests, income, brand
preferences, etc. Businesses use the merged database to target specific customers or identify trends in order to remain
competitive. Businesses might purchase software in order to prepare questionnaires or direct-mail pieces that will be sent
to customers, but not to manage mar-keting information.
SOURCE: IM:183
SOURCE: pp. 84-85, Marketing. Evans, J.R.; Berman, B., Prentice-Hall, 7th ed., 1997.
36.
C
Sales. A business whose sales are expected to increase knows it may need more workers, while a business whose sales
are expected to decline or to remain the same will not need more workers. Decisions about promotion, finance, and
purchases are all based on anticipated sales.
SOURCE: IM:003
SOURCE: IM LAP 3--Nature of Sales Forecasts
37.
A
Digital dossiers. A digital dossier is information that can be gathered from the Internet. Information such as company
profiles on public corporations, income statements, and balance sheets are all available online. The alternatives are not
Internet sources of secondary data.
SOURCE: IM:185
2002.
38.
A
Sales activity reports. Individual sales representatives usually prepare monthly sales activity reports that contain
information not only about sales, but also about competitors' activities and any changes that occur in the marketplace.
Salespeople deal with customers daily and are in a position to find out what their competi-tors are doing in order to sell
their products. This might include information about sales techniques, special pricing, unique services, or credit
arrangements. Salespeople also find out when customers' preferences change and when they may have more money
available to spend. Businesses review this type of marketing information in order to remain competitive and meet
customers' changing needs. Accounts receivable reports indicate all the monies owed to a business by its customers.
Customer comment cards provide information about how customers rate the business's overall performance. Employee
performance reviews evaluate performance on the job.
SOURCE: IM:186
SOURCE: pp. 96-97, Marketing Research: A Practical Approach for the New Millennium. Hair, J.F.;
Bush, R.P.; Ortinau, D.J., Irwin/McGraw-Hill, 2000.
39.
B
To define the reason for the research. Exploratory research is marketing research that collects information to help the
business define the reason for its research and to decide which direction to take to address it. Predictive research is used
to help the business forecast future business developments. Causal research focuses on cause and effect and tests "what
if" theories. Research that gathers specific information related to the business's identified situation, problem, or concern is
called descriptive research.
SOURCE: IM:010
SOURCE: IM LAP 5--Nature of Marketing Research
Test 772
KEY
40.
A
Mean, median, mode. Mean is the average, median is the exact middle, and mode is the most common response. When
the mean, median, and mode coincide in statistics, you have normally distributed data that is indicated by a symmetrical,
pictorial representation (curve). The alternatives do not indicate normally distributed data.
SOURCE: IM:191
SOURCE: pp. 429-430, 498-501, Marketing Research. Burns, A.C.; Bush, R.F., Prentice Hall, 3rd ed., 2000.
41.
B
Research methods. One portion of a marketing report contains a detailed explanation and description of the research
methods and how the data were collected. This section should explain what types of secondary data were used and how
the primary data were collected (questionnaire, telephone survey, etc.). This section also should provide a description of
the questions that were asked and a profile of the people who were surveyed. A detailed description of research methods
and data collection procedures adds credibility to the report. Marketing reports do not describe writing styles, outline
preliminary costs, or list local regulations.
SOURCE: IM:192
SOURCE: pp. 613-615, Marketing Research: A Practical Approach for the New Millennium. Hair, J.F.; Bush, R.P.;
Ortinau, D.J., Irwin/McGraw-Hill, 2000.
42.
A
Market. A market is a customer or potential customer who has an unfulfilled desire and is financially able and willing to
satisfy that desire. Liza is a market because she not only wants a horse but has the money to buy one. A resource is an
item that is used to produce goods and services. A target group is a particular segment of the market. A market segment
is one of the groups into which the total market is divided.
SOURCE: IM:196
SOURCE: MB LAP 5--Market Identification
43.
B
Environmental scanning. Businesses need to understand changes in their environment in order to adapt and remain
competitive. They often use a procedure known as environmental scanning to gather information about changes or trends
that are beginning to develop in the marketplace. This procedure allows business-es to identify changes at an early stage
and decide if they present a threat to the way the business is cur-rently operating. Businesses do not use geographic
monitoring, demographic segmenting, or psychological profiling to identify changes that are developing.
SOURCE: IM:140
SOURCE: pp. 43-44, Marketing. Zikmund, W.G.; d'Amico, M., South-Western College Publishing, 6th ed., 1999.
44.
A
Past sales. Sales data show whether product or overall sales have been increasing or decreasing. Fore-casters should
also compare sales by selling periods to determine which times of the year usually have the largest total sales and what
sales trends are for individual products. Profit margin is a ratio of net profit divided by net sales that reflects the profit-perdollar of sales. Credit terms define the ways in which cus-tomers may use credit and are not useful in forecasting sales.
Planned purchases are often determined by the sales forecast.
SOURCE: IM:009
SOURCE: IM LAP 4--Forecasting Sales
45.
D
They are unable to get along with others. Of all the people who lose their jobs, approximately 85% do so because they are
simply not able to get along well with others. You must be able to deal effectively with supervisors, coworkers, and
customers if you are to keep your job. You can learn how to carry out job tasks, ways to communicate, and technical
information.
SOURCE: IS:003
SOURCE: HR LAP 1--Human Relations: What, Why, How
46.
D
Result in customer satisfaction. Making customers feel important is a goal of demonstrating a customer-service mindset.
Customers should feel welcome and that their satisfaction is important to everyone con-cerned. By focusing on customer
needs, employees can increase sales and benefit the business. The customer-service mindset should be practiced by all
employees regardless of whether employees have direct contact with customers.
SOURCE: IS:006
SOURCE: HR LAP 32--Customer-Service Mindset
Test 772
KEY
47.
B
Build strong relationships. Negotiation can be a means of strengthening long-term relationships with cus-tomers,
suppliers, coworkers, and other businesses. Negotiation demands a spirit of cooperation. Entering negotiation with the
idea of getting a certain action, keeping negative people quiet, or getting something done will not produce a situation that
allows everyone to feel they have gained through the process.
SOURCE: IS:012
SOURCE: U.S. Small Business Administration, Online Women's Business Center. (n.d.). Negotiating: You've Done It
Before. Retrieved August 5, 2003, from http://www.onlinewbc.gov/Docs/ manage/negotiating.html
48.
B
Span of control. In most companies, lower level management has a wider span of control, or more employ-ees to
supervise, than top management. Accountability is the employee's responsibility to carry out his/her assigned tasks. Unity
of command means no employee reports to more than one supervisor. Line-and-staff organization is a method of business
organization that includes specialists in each department.
SOURCE: MN:723
SOURCE: pp. 338-339, Business Principles and Management. Everard, K.; Burrow, J., South-Western, 11th ed., 2001.
49.
D
Quantitative. Job performance standards that can be measured in terms of numbers, such as sales per hour, are called
quantitative standards. Qualitative standards refers to job standards that cannot be measured in terms of numbers, such
as cooperating with coworkers. Attitudinal job factors refers to employee attitudes and levels of enthusiasm. Specific job
factors would refer to any specified factor being evaluated.
SOURCE: MN:122
SOURCE: pp. 4-5, Manager's Portfolio of Model Performance Evaluations. Toropov, B., Prentice-Hall, 1999.
50.
D
Brings in more applicants. External recruiting seeks new employees outside the business. This creates a larger pool of
candidates from which the business can choose than internal recruiting. It may also be the only way to attract applicants
with the required skills and knowledge. The other alternatives are advantages of filling positions from within the
organization.
SOURCE: MN:017
SOURCE: pp. 134-159, Human Resource Management. Dessler, G., Prentice Hall, 8th ed., 2000.
51.
D
Decreased cost of selection. Careful selection of employees can save money through reduced costs associated with
hiring and training and through increased levels of productivity. Other benefits of good employee selection are reduced
risk of poor employee morale, reduced risk of poor job performance, reduced employee turnover, and time savings.
SOURCE: MN:018
SOURCE: MN LAP 51--Selecting New Employees
52.
A
It helps them feel a part of the company. To accomplish this, you should describe the entire company by summarizing its
origin, objectives, development, growth, product/service line, outstanding or significant company achievements, future of
the business, priorities for business and community involvement, company problems, trends for the industry, and a review
of the company's organizational chart. In discussions of job-specific assignments, you can let employees know what is
expected of them, provide an explanation of their jobs, and give them specific product information.
SOURCE: MN:691
SOURCE: MN LAP 44--Orienting New Employees
53.
B
Leadership is a style or way of performing. Management and leadership are not the same, or synonymous. Management
is the process of getting things done, and it includes planning, organizing, directing, motivating, and controlling.
Leadership is a way or style of doing things that achieves the desired results. It is more than management.
SOURCE: MN:030
SOURCE: MN LAP 41--Take the Lead!
Test 772
KEY
54.
C
Maslow's Hierarchy of Needs. This is the most widely recognized need-classification scheme. Needs are arranged in a
hierarchy such that individuals attempt to satisfy some needs before moving on to others. The five levels of needs are
physiological, safety/security, social, esteem, and self-actualization. Equity Theory suggests that people are motivated to
close the gap between their efforts and the amount of reward they receive. Expectancy Theory states that motivation is
the result of comparing the outcomes that one desires with one's estimate of the prospect of attaining those desired
outcomes. Herzberg's Two-Factor Theory classifies needs into two categories: hygiene factors and motivation factors.
SOURCE: MN:029
SOURCE: MN LAP 47--Staff Motivation
55.
C
Identify the problem behind the complaint. Employee complaints do not always address the actual problem but only the
results of a problem. Before a complaint can be resolved, the problem that has caused the complaint must be identified.
The individual investigating the complaint should do so in an objective manner without letting personal judgment interfere
in the investigation. Considering all possible solutions and docu-menting the resolution to the complaint are later steps in
dealing with complaints.
SOURCE: MN:034
SOURCE: MN LAP 45--Handling Employee Complaints
56.
B
Reorder point. The reorder point is the level at which a business needs to place an order for new supplies. The reorder
point will be different for each business depending on individual use of supplies, such as wrap-ping paper and bags.
Businesses want to keep in stock the right amount of supplies to meet their needs without running short. Knowing the
reorder point helps businesses maintain supplies at the appropriate level. The final cost, prime rate, and contract price are
not involved in maintaining supplies at the appropriate level to meet needs.
SOURCE: MN:156
SOURCE: pp. 109-110, Hospitality Marketing: Lodging. Upchurch, R.S., Glencoe, McGraw-Hill, 1995.
57.
A
Sales. A sales budget reflects the amount of money a business expects to earn from sales over a certain period of time.
This figure usually is close to the total funds a business will have available to spend. A business starts with this figure
when developing all other budgets because a business knows that it cannot plan to spend more money than it expects to
earn. The income budget includes revenue from sales as well as any interest from dividends, savings accounts, etc. A
cash budget estimates all money coming into the business from every possible source. A capital budget estimates
expenditures for replacing fixed assets such as buildings and equipment.
SOURCE: MN:083
SOURCE: p. 289, Small Business Management: An Entrepreneur's Guide to Success. Megginson, W.L.; Byrd, M.J.;
Scott, C.R.; Megginson, L.C., Irwin, 1994.
58.
B
43 3/4%. The gross margin percentage is the comparison of gross margin to net sales. To determine gross margin
percentage, subtract cost of goods from net sales to determine gross margin ($80,000 $45,000 = $35,000). The gross
margin percentage is then determined by dividing gross margin by net sales ($35,000 $80,000 = .4375 or 43 3/4%).
SOURCE: MN:162
SOURCE: pp. 55-56, Merchandising Mathematics: High Margin Returns for Retailers and Vendors. Paidar, M., Delmar
Publishers Inc., 1994.
59.
B
Performance targets. Managers develop broad objectives for a business, such as operate in a cost-efficient manner or
earn a sufficient profit. They use these objectives as the basis for setting performance targets. The performance targets
are the specific steps a business follows in order to achieve their main objectives. If the main objective is to earn a
sufficient profit, the performance targets might include establishing policies to control spending. A business's broad
objectives are not used as the basis for setting benefit levels, salary ranges, or recruitment quotas.
SOURCE: MN:074
SOURCE: pp. 130-132, Essentials of Management. DuBrin, A.J., Thomson/South-Western, 6th ed., 2003.
Test 772
60. D
KEY
Test 772
KEY
What if. . . . The what if. . . technique is similar to role-playing and is an excellent means of finding all the hidden aspects
of a problem. A business manager using this technique might take the ideas that were gener-ated in a brainstorming
session, apply them to a situation, and then ask what if. The manager might ask what
if the shape of the bottle was changed, or what if children instead of adults were used in commercials. Redefin-ing
involves looking at a problem from a different angle if no solution seems apparent. The sleep-on-it tech-nique involves
putting an idea aside for a day or two. Who-said is not a technique for increasing creativity.
SOURCE: PD:012
Test 772
SOURCE:
KEY
PD LAP 2--Creativity
61.
A
Activities that must be done next month. A daily "To Do" list contains the activities that a person plans to accomplish the
next day rather than in the next month. This list should be prepared at the end of one day for the next day and should be
based on the activities that appear on a weekly master list, activities that were previously scheduled for the upcoming day,
and new activities that have surfaced during the day and must be completed the next day.
SOURCE: PD:019
SOURCE: PD LAP 1--Time Management
62.
D
Number of employees. Association dues may be a flat fee, a percentage of annual sales, or a figure based upon the
number of employees. The location of the business, its age, and the type of ownership have no bearing on trade
association dues.
SOURCE: PD:036
SOURCE: CD LAP 1--Trade Associations/Professional Organizations
63.
B
Services. Pricing would be a relatively simple process if businesspeople only had to consider the cost of the physical
product when setting prices; however, they must actually price the physical product and its asso-ciated services such as
credit, delivery, etc. Features are the physical characteristics of a product. Value is the amount of satisfaction a product
will provide the customer. Benefits are the advantages customers obtain from using a product.
SOURCE: PI:001
SOURCE: PI LAP 2--Pricing
64.
C
Electronic marking. Electronic marking is a procedure that allows businesses to use a device to code prices onto tags or
tickets. These electronically marked prices can be read and processed by optical scanners at checkout counters. The
price information then is transmitted through the business's computer system which automatically deletes the product from
inventory. The electronic marking system allows businesses to main-tain accurate information about the product. Optical
scanning is a method of reading prices that are marked electronically. Magnetic transferring and digital processing are not
ways of attaching prices to products.
SOURCE: PI:016
SOURCE: pp. 439-440, Retailing. Lewison, D.M., Prentice-Hall, 6th ed., 1997.
65.
B
Selling price. Selling price is usually thought of as the dollar figure shown on the price tag of products. Cash flow is the
movement of funds into and out of a business. Cost of goods is the cost to the business of obtain-ing products for resale.
Profit is the funds a business has left from its sales income after paying its costs and expenses.
SOURCE: PI:002
SOURCE: PI LAP 3--Factors Affecting Selling Price
66.
B
$1,020. Many businesses offer reduced prices for purchases made ahead of the season. In this case, the final cost of the
items to the business is determined by multiplying the percent of the seasonal discount by the price and then subtracting
the discount amount from the price ($1,200 x 15% = $180; $1,200 $180 = $1,020).
SOURCE: PI:019
SOURCE: pp. 82-84, Marketing and Essential Math Skills: Teacher's Edition. Stull, W.A., South-Western Educational
Publishing, 1999.
67.
A
Reduction off the list price. Trade discounts are price reductions given to channel members as payment for services
rendered. A promotional allowance or discount is a reduction in wholesale price in return for a retailer's promise to
promote a product. A trade discount is not a price but a reduction in price.
SOURCE: PI:022
SOURCE: pp. 598-599, Business Principles and Management. Everard, K.; Burrow, J., South-Western, 11th ed., 2001.
68.
B
Gather cost information. An important step in setting the prices of goods or services is gathering complete information on
the cost of selling the good or service. This information includes how much it costs to pro-duce, buy, transport, market,
etc., the specific good or service. Businesses need this information in order to set prices that adequately cover all the
selling costs and also earn a profit. Obtaining credit reports, review-ing advertising data, and analyzing marketing plans
Test 772
KEY
are not steps in setting the prices of goods or services.

SOURCE: PI:007
SOURCE: pp. 285-286, Marketing Practices and Principles. Mason, R.E.; Rath, P.M.; Husted, S.W.; Lynch, R.L.,
Glencoe, Macmillan/McGraw-Hill School Publishing Co., 5th ed., 1995.
69.
C
Test marketing. Test marketing is the process of introducing a new product to a limited market to determine what its
acceptance will be. Concept testing is the exploring of the concept, or idea, for a product in order to obtain feedback.
Product development involves the creation of a new product in which a working model may be tested, modified, and
retested; production costs are estimated; and final details of the product are planned. Product screening is the process of
considering each idea for a new product and discarding those that seem unworkable.
SOURCE: PM:001
SOURCE: PP LAP 5--Product/Service Planning
70.
C
Growth. Growth is the product life-cycle stage in which sales rise rapidly. During that stage, businesses can expect an
increase in sales which results in significant profits. The introduction stage is when the product first appears in the
marketplace. Decline is the stage in which sales and profits fall rapidly. Maturity is the stage where the product reaches a
plateau.
SOURCE: PM:024
SOURCE: pp. 334-337, Contemporary Marketing. Boone, L.E.; Kurtz, D.L., Thomson/South-Western, 11th ed., 2004.
71.
C
To protect products and consumers. The original intent of packaging was to protect the product and to pre-sent it to
consumers in an appealing manner. Today's packaging is often designed to protect the consumer, as well, by preventing
anyone from tampering with the product or using the product improperly. Some types of packaging do secure the contents
of the package and protect products from breakage, but these are secondary goals. Businesses would not want to
decrease the extent of product usage.
SOURCE: PM:017
SOURCE: PP LAP 7--Consumer Protection in Product Planning
72.
A
A pizza carryout added Italian entrees to its pizza menu. Increasing the breadth of the product mix involves adding product
lines. A product line is a group of related product items. The restaurant has increased the breadth of its product mix by
adding a line of dinners to its line of pizzas. Increasing hours of service or opening a branch store would not increase the
breadth of the product mix. Dropping a line of radios would narrow the automotive store's product mix.
SOURCE: PM:003
SOURCE: PP LAP 3--Product Mix
73.
A
Loyalty. When consumers get into the habit of buying certain brands, known as brand loyalty, they auto-matically make
repeat purchases of that brand. This reduces the amount of time needed to make a sale. Experience with a brand does
not always generate sales. Consumers who have developed resistance to a brand or object to it for some reason are not
likely to buy it repeatedly.
SOURCE: PM:021
SOURCE: PM LAP 6--It's a Brand, Brand, Brand World!
74.
C
Clear set of values. Successful brands stand for something, and they are built around a clear philosophy of how the
business should treat customers, whether over the telephone or face-to-face. They approach every-thing from the
customer's perspectivenot the business'sbecause they know that this is key to building lasting relationships with
customers. Their expectations are high, demanding that service be delivered consistently and be more than satisfactory.
They take advantage of multiple opportunities to make lasting connections with customers, including through their names,
logos, advertising, and customer services.
SOURCE: PM:126
SOURCE: PM LAP 10--Building Your Business's Brand
Test 772
KEY
75.
D
Select appropriate products. Promotion helps the customer determine which product is the right one for him/ her, or the
most appropriate. Promotion introduces new products to consumers and assists with decision making. It does not help
consumers to spend more on products or delay decisions. It is the salesperson's job to identify the customer's buying
motives, or reasons for buying.
SOURCE: PR:001
SOURCE: PR LAP 2--Promotion
76.
D
Personal selling. Products sold to industrial consumers are usually technical, expensive, and require demon-stration.
Because of these characteristics, personal selling should be emphasized. The alternatives could be used to support
personal selling.
SOURCE: PR:003
SOURCE: PR LAP 1--Promotional Mix
77.
C
Young children have a limited ability to evaluate information. Their understanding is often literal, and many times they
accept what they hear without question. To be ethical, advertisers should be truthful and not mislead children.
Exaggerated claims do not necessarily give more details. Children often believe what they are told. Many of them have
the capacity to understand detailed information.
SOURCE: PR:099
SOURCE: Children's Advisory Review Unit. (2001, December). Self-Regulatory Guidelines for Children's Advertising.
Retrieved August 5, 2003, from http://www.caru.org/guidelines/index.asp
78.
C
Slogan. A slogan is a phrase that is easy to remember. It often becomes identified with the product or the advertiser, who
may be the producer and/or seller of the product. Copy is the text of an ad. Headline is the text set in large type and
usually positioned at the top of the ad. Illustration is a photograph, drawing, painting, or graphic.
SOURCE: PR:014
SOURCE: PR LAP 7--Parts of Print Ads
79.
C
Make sure the copy includes as many clichs as possible. Try to eliminate clichsoverused expressions such as
"guaranteed lowest price anywhere." Copy should contain accurate information; avoid misleading the reader by using
misleading statements or withholding information consumers need in order to compare products; and be free from spelling,
punctuation, and grammatical errors.
SOURCE: PR:016
SOURCE: PR LAP 9--Preparing Print Ad Copy
80.
D
Outdoor and transit media. Outdoor and transit media offer many cost-effective choices, such as billboards located on
busy streets or ads on the sides of buses, and would be highly visible to the healthy, active people who are out enjoying
the summer. Television spots are not cost-effective, and viewing is much lower in the summer because people are out
enjoying the warmer weather. Direct mail is likely to be thrown out as junk mail by busy people. The advertising costs for
national magazines tend to be quite high.
SOURCE: PR:009
SOURCE: PR LAP 6--Calculating Media Costs
81.
A
Recall test. A recall test involves asking consumers whether they remember an advertisement. The test may include
questions about specific aspects of the ad in order to determine the ad's impact. A portfolio test is used to pretest ads
before they are presented. A recognition test is used to evaluate the effectiveness of print advertisements. A market test
introduces a product to a limited target market in order to forecast the product's success in the whole market.
SOURCE: PR:013
SOURCE: pp. 536-538, Principles of Marketing. Lamb, C.W. Jr.; Hair, J.F. Jr.; McDaniel, C., South-Western Publishing
Co., 2nd ed., 1994.
82.
A
News releases. A news release is a factual announcement sent to the media to be used as a news item. Sending out
news releases usually is a successful technique because the public generally has more confi-dence in and is more likely to
believe the news stories about the business than the business's paid adver-tising. Paid advertising is any paid form of
nonpersonal presentation of ideas, goods, or services. Direct mail is a promotional medium that comes to consumers'
Test 772
KEY
homes in the form of letters, catalogs, postcards, and folders. Telemarketing is personal selling that takes place over the
telephone.
SOURCE: PR:057
SOURCE: PR LAP 10--Writing News Releases
83.
C
Attracts attention and creates excitement. Many businesses use contests and games to attract attention and bring more
customers into the business. This type of specialty promotion creates excitement and attracts customers, with the
possibility of winning a prize. The result of such a promotion often is increased sales because more people are visiting the
business in the hopes of being a winner. These promotional activities should be planned with care because they must
conform to current laws. There are expenses involved, including direct mail or advertising of the promotion, setting up the
game or contest, determining the winner, and paying for the prize(s). Public relations, rather than specialty promotion, is
intended to create positive public attitudes.
SOURCE: PR:106
SOURCE: pp. 431-433, Advertising Principles & Practice. Wells, W.; Burnett, J.; Moriarty, S., Prentice Hall, 6th ed.,
2003.
84.
B
Market research. Market research is the gathering, analysis, and interpretation of information about a specific marketing
question or problem. Businesses use the information they obtain from market research to develop realistic promotional
objectives. The research helps businesses to identify target markets and to develop strategies that will effectively reach
those customers. The objectives should be developed before the budget is prepared in order not to scale down the
objectives because of the expense. Local publicity and vendor surveys do not provide the type of information that is used
in developing promotional objectives.
SOURCE: PR:073
SOURCE: pp. 534-536, Marketing Foundations and Functions. Burrow, J.; Eggland, S., South-Western Publishing,
1995.
85.
D
Sending out samples of a new product that is on display. In this situation, the promotional activities of dis-play and sales
promotion are being coordinated for the purpose of introducing and selling a new product. Advertising a sale or obtaining
publicity for new products are examples of single promotional efforts, not coordinated efforts. Using personal selling to
earn a sales commission is an effort to reach a personal goal.
SOURCE: PR:076
SOURCE: pp. 302-304, Marketing Essentials. Farese, L.S.; Kimbrell, G.; Woloszyk, C.A., Glencoe McGraw-Hill, 3rd ed.,
2002.
86.
C
Shell Oil Company's paying 50% of the cost of a Shell station's promotion. Cooperative advertising is an arrangement
between a producer or vendor and a local business to share in the costs of promotion. The arrangement benefits the local
business by making its advertising dollars go further and benefits the larger company because it can buy advertising at
local rates. The other alternatives are different types of promo-tions that are being carried out by service stations on their
own.
SOURCE: PR:071
SOURCE: pp. 486-487, Advertising Principles & Practice. Wells, W.; Burnett, J.; Moriarty, S., Prentice Hall, 6th ed.,
2003.
87.
B
Prospecting. Prospecting is the act of identifying any person or organization with the potential to purchase a good or
service and compiling that information in an organized manner for future use. Follow-up is contact with customers after a
sales presentation regardless of whether a sale has resulted. A service attitude reflects a strong commitment to the client
and his/her needs. A sales presentation is that part of the selling process in which the salesperson shows the customer
the benefits of a product's features and includes the sales talk and product demonstration.
SOURCE: SE:828
SOURCE: SE LAP 115--Building Clientele
88.
A
Unethical behavior. Most businesses have guidelines that cover specific situations that may create ethical problems for
salespeople. One of these situations involves entertaining or giving gifts to customers. Many salespeople routinely take
customers to lunch or send them samples of new products. These activities are considered ethical and part of doing
business. However, giving customers expensive gifts is usually consid-ered to be unethical because such gifts may be
construed as bribes. Salespeople who give expensive gifts are not overstating expenses or violating local laws.
Test 772
KEY
Salespeople who give gifts may be offering bribes rather than accepting them.
SOURCE: SE:106
SOURCE: pp. 88-89, Fundamentals of Selling: Customers for Life. Futrell, C.M., Irwin/McGraw-Hill, 6th ed., 1999.
89.
Test 772
KEY
Activity. Activity quotas control the ways that salespeople use their time and efforts. Profit quotas encourage salespeople
to be profit oriented, rather than volume oriented. Financial quotas attempt to relate sales to an organization's total
expenses or profit. Expense/Budget quotas encourage sales-people to spend less than the allotted budget by offering
bonuses.
SOURCE: SE:864
Test 772
SOURCE:
KEY
SE LAP 118--Sales Quotas
90.
D
Hidden. Hidden benefits are advantages that cannot be seen or understood without the assistance of a salesperson. The
safety of some products is a benefit that may not be apparent unless the salesperson explained it. The salesperson may
need to point out certain product features and explain why those features make the product safe in order to describe the
benefits. Obvious benefits are advantages that need little explanation by the salesperson. An exclusive benefit is the only
one of its kind. Costly is not a type of benefit.
SOURCE: SE:109
SOURCE: SE LAP 113--Feature-Benefit Selling
91.
D
Customer. The customer's situation is important in precall planning. It can be done by research and by visiting the
prospect to learn more about any needs. Salespeople should know their products, their business, and their territory before
precall planning begins.
SOURCE: SE:067
SOURCE: p. 451, Marketing: Principles and Perspectives. Bearden, W.O.; Ingram, T.N.; Laforge, R.W., Irwin, 3rd ed.,
2001.
92.
D
Customer personality. A customer's personality is the combination of the person's distinctive traits or quali-ties. The desire
for bargains or for quality are two traits that make up an individual's personality. Either trait could affect a specific purchase
decision, but the customer's overall buying decisions will be dictated by his/her personality. The salesperson's commission
would not affect a customer's decision to buy.
SOURCE: SE:810
SOURCE: SE LAP 112--Addressing Individual Needs
93.
A
Jonathan's age level. Jonathan's desire for a tricycle, coloring books, and toy soldiers is directly related to his age. As he
grows older, his wants and needs will change. Jonathan's place of residence, current economic conditions, and the time of
year are not related to this situation.
SOURCE: SE:883
SOURCE: SE LAP 102--Using Buying Motives (Part I)
94.
B
"For what purposes will you be using your computer?" This question will obtain information from the cus-tomer to help you
select an appropriate model. Asking if the customer agrees that a printer has an excellent print quality is an opiniongathering probe designed to elicit customer reaction to what you have said. The questions about inserting the diskette and
demonstrating the program are confirming probes that are used to check for accuracy or understanding.
SOURCE: SE:113
SOURCE: SE LAP 120--Probing
95.
C
Deny-it method. In the deny-it method, the salesperson directly denies the customer's objection. The deny-it method may
be the poorest way to answer objections because it is hard to tell customers they are wrong without offending them. This
method must be used with great care. The show 'em method answers the objection by showing the product in use. The
yes, but . . . method tactfully acknowledges the objection and then courteously answers it without directly contradicting the
customer. In the inquiry method, the sales-person asks questions of customers to enable customers to answer their own
objections.
SOURCE: SE:874
SOURCE: SE LAP 100--Converting Objections
96. D
False, appropriate follow-up after an unsuccessful sales presentation may lead to future sales. Follow-up should be used
whether or not a sale takes place. Follow-up after an unsuccessful sales presentation may set the stage for a long-term
relationship with the client. Follow-up with a client after a successful sales close is a way to ensure customer satisfaction.
Clients who do not buy should not be removed from the active file, because they may buy in the future.
SOURCE: SE:057
SOURCE: SE LAP 119--Follow-up Strategies
97.
B
$75.40. To determine the total amount owed by the customer, calculate the sales tax by multiplying the amount of the sale
Test 772
KEY
by the tax rate ($72.50 x 4% or .04 = $2.90); then, add the subtotal and the sales tax ($72.50 + $2.90 = $75.40).
SOURCE: SE:117
SOURCE: MA LAP 48--Completing Sales Checks
98.
A
Endless-chain. In this method, the salesperson asks every prospect to give the names of others. The goal is to increase
the pool of prospects, thereby increasing the chances of making a sale. Personal observation involves awareness of one's
surroundings for prospecting possibilities. Salespeople hire others to generate prospect lists in the bird-dog method. A
salesperson using the center-of-influence method would ask a dominant member of a group to use or endorse his/her
product(s).
SOURCE: SE:001
SOURCE: SE LAP 116--Prospecting
99.
B
Territory B. Sales reports often contain statistical information about projected sales for both the business and for specific
territories. In many cases, each territory is expected to achieve a certain percentage of the company's projected total
sales. By analyzing the sales reports, a business can determine which territories are producing as expected and which
ones might have problems that need to be corrected. In this situation, territory B was expected to achieve 20% of total
sales and exceeded that projection. To determine if territory B met its goal, multiply the total projected sales for the month
by the percentage assigned to territory B ($2,450,000 x 20% or .20 = $490,000). Since the goal was $490,000 and
territory B sold $491,000, it ex-ceeded its goal by $1,000 ($491,000 $490,000 = $1,000).
SOURCE: SE:056
SOURCE: pp. 520-527, Sales Force Management. Churchill, G.A.; Ford, N.M.; Walker, O.C.;
Johnston, M.W.; Tanner, J.F., Irwin/McGraw-Hill, 6th ed., 2000.
Test 772 MARKETING MANAGEMENT

100. B
Role-playing. Role-playing is a simulated selling situation in which one trainee plays salesperson and another
plays customer. Trainees are forced to become personally involved in a selling situation that pre-sents
problems they are likely to encounter in the field. Role-plays are often videotaped for later review. Lectures
are appropriate for presenting factual information such as company history or industry trends. Case studies
encourage communication among participants and develop problem-solving skills. Programmed instruction is
useful in conveying knowledge.
SOURCE: SE:055
SOURCE: SE LAP 123--Sales Training

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Test 772

2004 DECA Ontario Provincials

Why is it important for a business to budget a certain amount of money to savings?

Businesses develop a quality culture by a combination of continual improvement and

Which of the following demonstrates a good security practice:

2004 DECA Ontario Provincials

Exclusive dealing is considered illegal in all of the following except if the

Successful channel member evaluations are often conducted on the basis of

2004 DECA Ontario Provincials

The Consumer Price Index is often used to measure

Which of the following has an impact on trade balances:

Which of the following is an example of an unethical method of collecting marketing information:

Why do many businesses use computer technology to manage marketing information?

A business's personnel needs are ultimately determined by the company's

Why do businesses use exploratory research?

2004 DECA Ontario Provincials

An important tool used in forecasting sales is the business's

What is the major reason that people lose their jobs?

C. They cannot carry out job tasks.

Businesses should view negotiation as a way to

C. get the action they want.

The number of people who are supervised by an individual is called

The difference between management and leadership is that

2004 DECA Ontario Provincials

Which of the following is a beginning step to take in handling an employee complaint:

Which of the following types of budgets do most businesses prepare first:

Which of the following often determines trade association dues:

The amount that a seller charges for a good or a service is known as

2004 DECA Ontario Provincials

What has become the major purpose of product packaging?

Businesses benefit from repeat sales to consumers who have brand

The most successful brands are based on a

C. clear set of values.

Promotion benefits customers by helping them to

C. postpone buying decisions.

2004 DECA Ontario Provincials

Which of the following is an example of cooperative advertising:

Locating potential clients is referred to as

In precall planning, the salesperson focuses on learning more about the

What usually affects a customer's overall decision to buy?

2004 DECA Ontario Provincials

In a sales situation, which of the following is an example of an information-gathering probe:

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

pp. 235-236, Retailing. Lewison, D.M., Prentice-Hall, 6th ed., 1997.

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

are not steps in setting the prices of goods or services.

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

2004 DECA Ontario Provincials

SE LAP 118--Sales Quotas

2004 DECA Ontario Provincials

Test 772 MARKETING MANAGEMENT

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