Question 1. How can the use of an EDLP strategy increase a retailer’s profit margin?

1. How can the use of an EDLP strategy increase a retailer’s profit margin?

A. EDLP reduces the retailer operating expenses because employees don’t have to spend time continually making price changes.

B. EDLP increases the large variations in demand caused by frequent sales.

C. Employees provide less customer service because of the sale-stimulated throngs of people.

D. The stable prices caused by EDLP require the use of more weekly advertising.

2. For most of the past century, Sears enjoyed the success of Craftsman brand tools. Since Sears

communicates the brand’s durability through advertisement, performance and guarantees, Craftsman is the

leading brand of choice for consumers interested in purchasing tools. Which of the following statements

best describes Sears’ communication program?

A. Advertising alone was the strategy for Craftsman’s success.

B. Sears created a short-term objective of increasing sales.

C. Positive publicity single-handedly lifted Sears out of the marketing slump it had been experiencing for the past decade.

D. Sears created and maintained a long-term communication program about the Craftsman brand.

3. The multiattribute analysis method uses a weighted average to

A. assess transportation costs.

B. evaluate vendors.

C. determine inventory needs.

D. determine the best discount methodology.

4. Sports Authority anticipates running a print advertisement campaign during the beginning of the year in

support of customer’s anticipated New Year’s resolutions to get in physical shape. Sports Authority asks

their key vendors to partner with them in covering the expenses of the ad campaign. Vendors agree to

support the _______ as long as they are certain that their products will be featured in the advertisements.

A. spot promotion

B. partnering promotions

C. double pocket promotion

D. co-op advertising

5. How do buying staple merchandise categories differ from buying fashion merchandise categories?

A. The staples buying system requires more experienced buyers.

B. Monitoring sales and generating replacement orders with continuous replenishment is used for staple merchandise.C. Standard statistical techniques are used when buying fashion merchandise categories.

D. Buyers forecast sales at the category level for staple merchandise.

6. Janessa prefers high-end cosmetics but also likes a good deal. She only purchases her make-up at

department stores when they have a gift with purchase. Today she saw at Macy’s that if she buys $35

worth of Lancôme cosmetics she would receive a gift with purchase. This gift with purchase is a form of

what kind of sales promotion?

A. Special event

B. Rebate

C. Premium

D. Sample

7. Best Buy originally priced a private-label portable DVD player at $99, and then sold 1,200 units per

week. After raising the price to $120, sales dropped to 1,000 units per week. What would the item’s price

elasticity be?

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