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1. Which of the following are characteristics of a well-written executive summary:
A. Error-free, simple, and creative
B. Clear, concise, and error-free
C. Creative, concise, and informal
D. Concise, informal, and error-free
• 1. B
Clear, concise, and error-free. An executive summary is
a section of a formal report that highlights the most
important information that appears in the body of the
document. A well-written executive summary should be
clear, concise, and error-free. An executive summary
should be easy to read and simple to understand.
Because an executive summary is part of a formal
report, it should follow a formal format. An executive
summary does not need to be creative—its primary
purpose is to inform the reader about essential facts.
2. What should the first section of an executive summary contain?
A. A letter of authorization
B. A recommended course of action
C. A statement of the report's purpose
D. An acknowledgement of the report's sponsors
•
2.
C
A statement of the report's purpose. The executive
summary provides an overview of the entire report and
contains the most important information included in the
body of the report. The first section of the executive
summary should inform the reader about the purpose of
the report—the reason the report exists. For example, if
the report addresses a specific business problem, the
report should cite the problem in the purpose statement
of the executive summary. Recommendations are
addressed in the recommendations section of the report.
A letter of authorization might be included in a proposal
that a business submits to a potential client. By signing
the letter of authorization, the client provides approval to
proceed with an activity or project. The first section of an
executive summary does not acknowledge sponsors.
Sponsors support activities, events, or projects rather
than reports.
3. Which of the following types of material are often included as attachments to the
appendix of short reports:
A. Conclusions and recommendations
B. Table of contents
C. Title page
D. Supporting documents .
•
3.
D
Supporting documents. The purpose of the short report
is to present information in a concise and simple
manner. Therefore, documents that support the
information presented in the appendix of a short report
often are included as attachments rather than as parts of
the main body. Readers of the report have the option to
review the supporting documents or to rely solely on the
information in the short report. Table of contents, title
page, and conclusions and recommendations are main
parts of the short report.
4. Which of the following should businesspeople be sure to include in simple written
reports:
A. Necessary information only
B. Extensive charts and graphs
C. Complete bibliography
D. Names of all references
•
4. A
Necessary information only. A characteristic of simple
written reports is that they are concise and usually
contain only necessary information. The purpose of
simple written reports is to present important information
in a clear manner. Adding additional or supporting
information that is not absolutely necessary decreases
the effectiveness of simple written reports. Extensive
charts and graphs, complete bibliographies, and the
names of all references may be included in complex
written reports, but they are not used in simple written
reports.
5. Employees often use simple written reports to provide managers with __________
information.
A. extensive
B. analytical
C. in-depth
D. routine
5. D
Routine. Employees often use simple written reports
to provide managers with routine information, such
as the number of items sold each week. Routine
information is the type of data that managers need on
a regular basis in order to monitor the operation of
the business. Simple written reports are
straightforward and direct and contain only routine
business information. They do not contain analytical,
extensive, or in-depth information, which is usually
presented in complex written reports.
6. Which of the following is an advantage of labor specialization by job task:
A. Decreased worker dependency
B. Improved worker morale
C. Reduced boredom
D. Increased worker efficiency
D
Increased worker efficiency. Workers become highly skilled at the tasks
they perform because they do the same tasks repeatedly. However,
worker morale may worsen because of the increased boredom of doing
the same job over and over. This can result in increased absenteeism,
grievances, and complaints. Worker dependency increases because
workers must rely on one another in order to complete the final product.
7. A worker who sorts all of a business's mail every day is performing a task that has
A. high depth and low scope.
B. low depth and low scope.
C. low depth and high scope.
D. high depth and high scope.
B
Low depth and low scope. Scope is the number of
different operations you do on the job and the frequency
with which you do them. Depth is the amount of control
you have over the tasks that you do. Receiving,
sending, and sorting mail are routine tasks.
8. Members of Local Union 999 refuse to buy products that are made by their company,
Chip Rite. This is an example of
A. picketing.
B. boycotting.
C. striking.
D. ratifying.
B
Boycotting. Boycotting occurs when union members refuse to buy a
company's products because of a labor-management conflict.
Picketing occurs when union members carry signs and protest. To
ratify is to approve or vote in favor of something. Striking occurs when
union members refuse to work.
9. When union members of Local 654 arrived at work today, they found a sign on the
door stating that the business had closed temporarily and the employees were not
allowed to work. This is a pressure strategy known as a(n)
A. lockout.
B. injunction.
C. boycott.
D. strike vote.
A
Lockout. A lockout normally occurs
when contract negotiations break down,
and company officials want to force the
union to bargain. An injunction is a
court order forbidding the carrying out
of certain acts. A strike vote is taken by
union officials to determine whether
union members should strike, i.e., stop
working in order to force management
to meet their demands. A boycott is a
strategy in which union members refuse
to buy a company's products.
10. According to the law of diminishing returns, continuing to hire additional employees
will eventually cause the workers' individual production level to
A. decrease.
B. level off.
C. increase.
D. remain unchanged.
A
Decrease. The law of diminishing returns states that
after a certain point, hiring additional employees will
result in smaller increases in the overall level of
production. Overall productivity reaches its highest
level when there are a certain number of employees
using the available resources to do the work. If
businesses hire additional employees, the individual
production level decreases because there are too
many employees using the same resources, such as
equipment. In order for production to increase at the
desired level when businesses hire more employees,
the business also needs to buy additional equipment
and supplies and expand its space. According to the
law of diminishing returns, continuing to hire additional
employees does not cause individual production to
level off, increase, or remain unchanged.
11. Major Company hired a fifth employee and production increased by 1,000 units per
week, so it hired a sixth employee and production increased by an additional 900 units
per week. What should the company expect to happen if it continues to hire more
employees and does nothing to the work environment?
A. Level of production will increase proportionately.
B. Production per employee will fluctuate.
C. Production per employee will become more stable.
D. Production per employee will decrease.
D
Production per employee will decrease. The law of
diminishing returns states that after a certain point, hiring
additional employees will result in a decrease in the overall
level of production. Overall productivity reaches its highest
level when there are a certain number of employees using
the available resources to do the work. If businesses hire
additional employees, the level of production begins to
decrease because there are too many employees using the
same resources, such as equipment. In order for production
to increase when businesses hire more employees, the
business also needs to buy additional equipment and
supplies and expand its space.
12.
Based on the information in the following chart, determine the point at which
the law of diminishing returns begins to take effect:
Units of
A. Six workers
Number of
Products
B. Three workers
Workers
Produced
C. Five workers
1
12
D. Four workers
2
26
3
40
4
48
5
54
6
58
D
Four workers. The law of diminishing returns states that, at
some point, continuing to add workers will reduce overall
productivity. This occurs because there are limited amounts of
other variables such as work space and raw materials. In the
chart, the law of diminishing returns begins to take effect when
the fourth worker is hired. Production increased by 14 with the
addition of the second worker, and again by 14 with the
addition of the third worker. However, the addition of the fourth
worker only increased production by 8, which is the beginning
of the decline. Adding the fifth and sixth workers created an
even greater decline in productivity.
13. In which of the following situations would consumers' purchasing power decrease:
A. Federal income-tax rates decrease by 1/2%.
B. Pay raise is 5% and inflation rate is 6%.
C. Take-home pay remains at a constant level.
D. Interest rates decrease from 8% to 7%.
B
Pay raise is 5% and inflation rate is 6%. When the inflation rate is higher
than the percent of raise that employees receive, the purchasing power of
those employees decreases. This has a negative effect on the economy
because the higher inflation rate means higher prices for goods and
services. Although the employees received a raise, the raise was not equal
to the rate of inflation so employees actually lost purchasing power. They
have more money to spend, but the goods and services they want cost more
than their pay increase. When interest rates decrease, consumers'
purchasing power usually increases. Consumers' purchasing power does not
change if their take-home pay remains at a constant level and all other
variables remain the same. A decrease in federal income-tax rates usually
increases consumers' purchasing power.
14. How do spending levels impact the economy in an inflationary period?
A. Consumers and businesses spend less.
B. Overall spending generally remains unchanged.
C. Consumers spend less, but businesses tend to spend more.
D. Consumers keep spending no matter what; businesses are more cautious.
A
Consumers and businesses spend less. When inflation sets in
and prices rise, consumers change their spending habits, which
is disruptive to the economy. Depending on the degree of
inflation, consumer spending can fall dramatically, especially on
larger purchases such as homes. The housing industry has
been hard-hit during inflationary periods. Businesses also adjust
their spending habits, and when interest rates on business
loans are high, for example, they may cut back on factory
orders to reduce the cost of borrowing. A decline in orders often
causes factory layoffs. Changes in spending habits cause ripple
effects and can have a dramatic impact on the economy.
15. Melanie's country is experiencing an economic recession. The best thing that she
can do to help the economy expand is to ________ her money.
A. collect
B. save
C. earn
D. spend
D
Spend. If consumers do not go out and
spend, businesses have less revenue
to bounce back during a recession.
Businesses will then lay off more
employees who, in turn, will spend less,
and the recession will deepen. Saving,
collecting or earning money will keep it
from being reinvested in the economy,
thereby not helping the economy to
grow.
16. When inflation levels are low, businesses often consider
A. increasing interest rates.
B. reducing their personnel.
C. decreasing outputs.
D. expanding their operations.
D
Expanding their operations. Inflation refers to the rise in prices within an
economic system. When inflation levels are low, the economy often
experiences a period of expansion. Consumer purchasing power increases,
which often increases the demand for goods and services. Interest rates are
often low during an economic expansion, so it is a good time for a business to
borrow money to expand its operations. When a business expands its
operations, it might purchase equipment or increase its outputs (e.g.,
production, personnel) to meet the higher product demand. During an
economic contraction, inflation rates increase and as a result consumer
spending decreases, outputs decrease, and unemployment and interest rates
tend to increase.
17. What often happens to an economy during a mildly inflationary period?
A. Increased growth
B. Decreased prosperity
C. Decreased profits
D. Increased unemployment
A
Increased growth. During a mildly inflationary period, wages usually
increase more slowly than the prices of goods. Therefore, the cost of the
goods sold is higher than the cost of labor. As a result, businesses earn
more profits which enables them to expand and hire more employees.
The economy grows because more people are working and have income
to spend. This situation occurs only during a mildly inflationary period
because if inflation rises to a higher level, the economy experiences a
decrease in prosperity. High inflation also causes increased
unemployment and decreased profits for businesses.
18. When a nation's inflation rate is low, prices tend to
A. remain stable.
B. increase dramatically.
C. fluctuate daily.
D. reduce currency values.
A
Remain stable. Inflation is a rapid rise in prices that may occur
when demand exceeds supply or when productivity declines and
costs of labor go up. Generally, low inflation rates range between
one percent and four percent, which indicates a strong economy
and stable prices. Although some products' prices fluctuate on a
daily basis (e.g., gasoline), not all prices do. High inflation causes
a decrease in the value of a nation's currency.
19. Which of the following transactions would be counted in the gross domestic product:
A. A florist purchases plants from a nursery.
B. A bakery purchases 50 pounds of sugar.
C. A customer purchases a sweater.
D. A restaurant purchases meat from a wholesaler.
C
A customer purchases a sweater. This is an example of a
personal consumption expenditure. Personal consumption
expenditures include the final market value of all services and
new and used goods purchased for consumption by individuals
and nonprofit institutions. In the case of the restaurant, the
florist, and the bakery, the purchases will be resold to
consumers, and that value will be counted in GDP.
20. How does double counting affect the gross domestic product?
A. It causes trade surpluses, which help the GDP.
B. It decreases the GDP.
C. It inflates the GDP.
D. It causes economic declines, which hurt the GDP.
C
It inflates the GDP. Double counting is counting the same production more than
once in determining GDP. This makes the value of GDP appear larger than it really
is. Double counting does not cause economic declines, which occur when the GDP
is not growing, or trade surpluses, which exist when the United States exports more
goods than it imports.
21. If transfer payments were counted in calculating gross domestic product, the GDP
would
A. appear to be greater than it actually is.
B. appear to be less than it actually is.
C. not include government spending.
D. not be affected.
A
Appear to be greater than it actually is. The value of government
payments, or transfers, of tax dollars to certain groups of people is not
counted. These groups include welfare recipients, veterans, and disaster
victims. Since these people do not provide goods or services in exchange
for the money they receive, no increase in the GDP results, and counting
these payments would inflate GDP.
22. Why do governments usually calculate the unemployment rate on a monthly basis?
A. To detect changes in the economy
B. To help workers find new jobs
C. To determine which businesses are failing
D. To prepare for receiving less tax money
A
To detect changes in the economy. The unemployment rate is an
indication of the health of the economy. If the rate is low, then most
people who want to work have jobs and income to support themselves.
If the unemployment rate starts to increase, it is an indication that
workers are losing their jobs, which might result in a slowdown in the
economy. By calculating the unemployment rate on a monthly basis,
governments are able to detect changes in the economy at an early
stage. Then, they may be able to take steps to correct problems before
they become serious and lead to a recession. Governments do not
calculate the unemployment rate to help workers find new jobs,
determine which businesses are failing, or prepare for receiving less
tax money.
23. A person who quits one job and spends a short amount of time out of work while
looking for a new position is an example of __________ unemployment.
A. seasonal
B. structural
C. cyclical
D. frictional
D
Frictional. Frictional unemployment describes people who are temporarily
between jobs. These people have the skills and training they need to
work but are unemployed because they are looking for jobs or are
between jobs. They will be out of work for only short periods of time;
therefore, they do not contribute to the national unemployment problem.
Structural unemployment results when people have job skills, but the jobs
that require those skills do not currently exist. Cyclical unemployment
occurs during periods of time when there is low demand for workers.
Seasonal unemployment occurs when people are out of work because of
factors that involve the time of year.
24. What is one reason why the overall unemployment rate understates the actual
employment situation?
A. Underemployed people are listed.
B. The rate is not seasonally adjusted.
C. Discouraged workers are not included.
D. The rate reflects regional differences.
C
Discouraged workers are not included. Discouraged workers are those
people who want to work but have given up looking for jobs. Most of
these people have been out of work for a long time and no longer show
up in the records that track people who are looking for work or
receiving unemployment benefits. As a result, the unemployment rate
usually is higher than indicated because of the people who are not
included. The unemployment rate is seasonally adjusted.
Underemployed people are not included in the unemployment rate
because they are working. The overall unemployment rate does not
reflect regional differences; however, there are rates available for
specific geographic areas.
25. The best time for a business to purchase new equipment is when
A. job growth declines.
B. consumer demand decreases.
C. interest rates are low.
D. the gross domestic product falls.
C
Interest rates are low. Interest is the money payments for the use of
borrowed money. Payment amounts vary when interest rates change. The
best time for a business to make an expensive purchase is when the interest
rates are low because the business will pay less money to finance the loan
so it can obtain the equipment. Low interest rates are common during an
expansion of the business cycle. Declines in consumer demand, job growth,
and the gross domestic product are economic conditions that often occur
when the business cycle experiences a contraction.
26. Fluctuations in interest rates often have an impact on the use of
A. tax incentives.
B. credit.
C. discounts.
D. rebates.
B
Credit. Credit is the arrangement by which businesses or individuals
can purchase now and pay later. When businesses and individuals
buy on credit, they pay interest on the amount of credit. If interest
rates increase, businesses and individuals often stop buying on credit
because it is too expensive. For example, if the interest rate is 4% and
the amount of credit is $100, the cost of buying on credit is $4.
However, if the interest rate increases to 15%, the cost of $100 credit
is $15. Therefore, high interest rates usually cause businesses and
consumers to hold off buying expensive items on credit. Fluctuations
in interest rates do not have an impact on the use of tax incentives,
discounts, or rebates.
27. Why does the Federal Reserve System raise interest rates?
A. To fight inflation
B. To increase demand for products
C. To decrease supply of products
D. To overcome inequalities of income distribution
A
To fight inflation. When a product's demand exceeds its supply,
the product's price will go up. Then, inflation increases, and
economic growth begins to slow. As the product's price
increases, its demand decreases. Less demand leads to less
production, and eventually, unemployment. By raising interest
rates, the Fed strengthens the value of the dollar, attracting
foreign investors, putting more money into the economy.
Inequalities of income distribution are not addressed by
increased interest rates.
28. Why should a businessperson understand business cycles?
A. To prevent the cycles from happening
B. To make plans that will help to level out cycles
C. To determine the cause of each cycle
D. To predict the exact beginning of cycles
B
To make plans that will help to level out cycles. By understanding
whether business activities will be expanding or contracting,
businesspeople can take steps to avoid the extreme ups and downs of
business cycles. They can anticipate changes that will be needed in
employment, production, pricing, and purchasing. These plans, however,
will not prevent cycles from happening. Unfortunately, businesspeople
cannot predict precisely when business cycles will begin or end, how long
they will last, or how severe they will be. There is no single cause of
business cycles.
29. What action expands economic activities?
A. Increasing inventory levels
B. Decreasing the purchase of durable goods
C. Increasing the unemployment rate
D. Decreasing investments in capital goods
A
Increasing inventory levels. When producers are optimistic about
business activity, they increase their inventory levels in order to be
prepared for the increase in demand. This action expands economic
activities. Increasing the unemployment rate, decreasing the purchase
of durable goods, and decreasing investments in capital goods would
contract economic activities.
30. Which of the following occurs as a result of discoveries:
A. Economic activities contract.
B. New jobs are created.
C. Money supply decreases.
D. Production levels decrease.
B
New jobs are created. Economic activities are often stimulated or expanded
by the discovery of new products, ways of doing something, and resources.
They encourage expansion rather than contraction of economic activities. As
a result, production levels increase, and the money supply increases.
31. A country imports goods and services from other countries in order to
A. create a trade deficit.
B. create a trade surplus.
C. participate in domestic trade.
D. satisfy domestic wants and needs.
D
Satisfy domestic wants and needs. Countries import goods that are in
short supply or unavailable in their own countries. A country may
create a trade deficit by importing more goods than it exports, but that
is not the purpose of importing. A trade surplus exists when the value
of a country's exports is greater than the value of its imports. Domestic
trade is trade within a country's borders.
32. The U.S. produces widgets faster and cheaper than Switzerland. In this example, the
U.S. has a(n) __________ advantage.
A. constructive
B. comparative
C. absolute
D. predictable
C
Absolute. The uneven distribution of productive resources enables one
country to be able to produce a good or service more cheaply than
another country can. For example, efficient factories and skilled labor
may enable the United States to produce office machines more cheaply
than they can be produced in Malaysia. A comparative advantage is the
benefit that a country obtains from specializing in and producing goods
and services at which it is relatively most efficient. Advantages usually
are not predictable. Constructive advantage is not a widely used term to
describe concepts related to international trade.
33. Which of the following factors is most likely to cause a country's currency value to
fall:
A. Rapid inflation
B. Standards
C. Decentralization
D. Fewer exports
A
Rapid inflation. Most countries have their own currency. A currency
value can change in relation to other countries' currency values. Many
factors can affect a currency's value. When inflation rises quickly, the
currency's value falls because it costs more money to buy goods and
services. A weak currency tends to increase exports because other
countries can buy more items with their strong currency. Standards are
specifications or statements that a business uses as a basis for
comparing or judging goods or services. Decentralization is a way of
organizing something so that responsibility and authority are distributed
among many departments or individuals.
34. In a floating exchange-rate system, currency values are determined by
A. changes in supply and demand.
B. the World Trade Federation.
C. a nation's import quotas.
D. a corporation's business strategies.
A
Changes in supply and demand. The value of a nation's currency
fluctuates in a floating exchange-rate system. Although many
factors can affect the value of a nation's currency, the floatingexchange rate is driven by the supply of and demand for the
currency. For example, suppose that a lot of people want to
exchange their currencies for the U.S. dollar on Tuesday. The
increase in demand will cause the price of the U.S. dollar to
increase. If demand drops, so will the value of the U.S. dollar. A
specific nation's import quotas, a powerful corporation's business
strategies, and the activities of the World Trade Federation may
affect the supply or demand for a particular nation's currency.
35. Which of the following is a factor that often enables certain countries to trade
successfully with each other:
A. Similar business subcultures
B. Same religious institutions
C. Equal governmental systems
D. Identical language traits
A
Similar business subcultures. The business subculture of each country has its own
unique beliefs, values, and ways of conducting business. The business subcultures
of some countries are very similar to those of other countries. For example, the
United States and the United Kingdom have similar business subcultures, which
means that the businesspeople in these countries understand each other and
conduct business in similar ways. Because of this, they trade successfully with
each other. Countries that have different business subcultures may not be able to
trade as successfully with each other because their businesspeople have different
ways of doing business and may not understand each other as well. Different
countries have different language traits, religious institutions, and governmental
systems which may make it difficult for them to trade with each other.
36. Which of the following is an example of body language that is accepted in the business
cultures of certain countries:
A. Wearing emblems and symbols
B. Hugging and holding hands
C. Acting individually
D. Speaking figuratively
B
Hugging and holding hands. Body language is communicating without
words through facial expression, posture, eye contact, or physical
distance. Certain types of body language are accepted in some cultures
but not in others. For example, in Arab countries, businesspeople hug
when they meet and often hold hands while discussing business issues.
Businesspeople in other cultures would consider this type of body
language to be inappropriate. Wearing emblems and symbols, acting
individually, and speaking figuratively are not examples of body language,
although they have different meanings and levels of importance to
businesspeople in the different cultures throughout the world.
37. What is an important social and cultural factor that has an impact on global trade?
A. Politics
B. Technology
C. Language
D. Economics
C
Language. Social and cultural aspects of a country include the customs,
habits, and traditions of the people. Language is an important sociocultural factor that involves how people communicate, both verbally and
nonverbally, as well as the meaning of words and gestures. It is important
for businesses involved in global trade to understand the language of other
countries to avoid speaking or acting in a way that might be considered
offensive. Technology, politics, and economics are factors that have an
impact on global trade, but they are not social and cultural factors.
38. Which of the following is a factor that may cause employees to feel stressed:
A. Constant tiredness
B. Inability to sleep
C. Nature of the job
D. Difficulty breathing
C
Nature of the job. Some jobs are stressful simply because of the type of
work involved. Employees who are involved in hazardous occupations,
for example, may routinely feel stressed. Employees who are
responsible for the well-being of others or who have responsibility for
handling large sums of money may experience stress. Many
occupations, by nature, are stressful, and people entering those
occupations need to be aware of the potential and know how to deal
with stress if it occurs. Inability to sleep, difficulty breathing, and
constant tiredness are physical signs of stress rather than causes of
stress.
39. One way that employees can control and manage their level of stress is to
A. avoid developing too many friendships.
B. add more responsibility to their lives.
C. hurry to complete complicated tasks.
D. set realistic standards for themselves.
D
Set realistic standards for themselves. Employees who set realistic
standards for themselves rather than expecting perfection all the time
are usually able to control and manage their level of stress. It is
important for employees to understand that they cannot perform
perfectly in all situations and that they will make some mistakes. Being
aware of this helps employees to manage stress because they will not
set their goals so high that they will often be unable to achieve them.
Striving to obtain perfection all the time increases stress and may
cause employees to think that they are failures if they don't live up to
those expectations. Adding more responsibility often increases stress.
Hurrying to complete complicated tasks is an indication that employees
are experiencing stress. Developing friendships is an effective way to
reduce stress.
40. Why is it important for employees to learn how to manage stress?
A. To achieve goals
B. To prioritize tasks
C. To budget time
D. To remain healthy
D
To remain healthy. Stress is a mental,
physical, or emotional feeling of
pressure or tension. When stress
increases or continues for a period of
time, it can have dangerous effects on
employees. Many employees who have
high levels of stress are more likely to
catch colds or the flu. As a result, it is
important for employees to learn how to
manage stress to remain healthy.
Learning how to prioritize tasks and
budget time are ways that employees
might be able to manage stress.
Employees often become stressed
when they are trying to achieve goals.
41. Which of following situations is an example of a response error:
A. Tim did not answer the last two questions on a written survey.
B. Jenny coded a survey respondent's answer with the number two instead of the
number three.
C. Ben found that the sample group was not representative of the target market.
D. Angela developed a written survey containing open-ended questions.
A
Tim did not answer the last two questions on a written survey. Response errors
occur when respondents do not correctly answer or complete a survey. These
errors may affect the quality of the overall data and the analysis process.
Because Tim didn't answer two questions on a survey, a response error
occurred. Errors may be intentional or unintentional. For example, a respondent
might refuse to answer a question because s/he believes it is too personal,
while another respondent might not answer a question because s/he did not
see it. Incorrect coding is an editing error. When a sample group is not
representative of the target market, a procedural error occurs. Developing
open-ended survey questions does not indicate a response error.
42. When Elliot was tabulating marketing research data, he transposed some numbers
as he was converting raw data into numerical values. What type of error occurred?
A. Measurement
B. Recording
C. Sampling
D. Response
B
Recording. Errors can occur at any
stage during the marketing-research
process. When a researcher
transposes numbers while transferring
information from surveys or other
research documentation into a
computer spreadsheet or in a written
document, it is a recording error. The
example does not present a
measurement, sampling, or response
error.
43. What should researchers consider when evaluating the design of questionnaires?
A. Names of developers
B. Size of paper
C. Types of questions
D. Number of participants
C
Types of questions. There are several
types of questions that can be written
for use in a questionnaire. These
include open-ended questions that
require more than a "yes" or "no"
answer, simple "yes" or "no" questions,
and multiple-choice questions. The type
of question used has an effect on the
information that will be collected.
Researchers evaluate the type of
question that will be used to obtain the
most useful response. Researchers do
not consider the size of paper, the
names of developers, or the number of
participants when evaluating the design
of questionnaires.
44. When evaluating the wording of a survey, the editor should make sure that each
question contains
A. simple words without jargon.
B. impressive but vague language.
C. clear, technical terms.
D. vocabulary with dual meanings
A
Simple words without jargon. Wording
is an important consideration when
developing a survey. To obtain
objective, honest answers, respondents
must be able to understand the
questions. This requires the use of
simple and clear (not vague) wording
so respondents are not confused when
they read the questions. Jargon is
technical language, which may confuse
respondents. Surveys should not
contain words with dual meanings
because these words may confuse
respondents, too.
45. What is the benefit of clearly stating a research problem or issue?
A. It determines the sample size needed for the marketing research project.
B. It helps to keep marketing research focused and relevant.
C. It determines the findings of the marketing research project.
D. It helps the researcher to determine whether a short- or long-term study is needed.
B
It helps to keep marketing research
focused and relevant. A clear definition
as to the research objective or problem
is essential. Stated clearly, it serves as
a guide to keeping marketing research
focused and relevant. Without a clearly
defined objective or problem, any
research done will have unnecessary
waste and unclear results. The problem
or objective does not determine the
needed sample size or the study's
length. The research findings should
result from implementation of the
scientific method in the research
process. Pre-determining the findings
violates proper research methodology.
46. Which of the following is a benefit of using multiple methods to acquire marketing
research data:
A. Helps the researcher to ensure the validity and reliability of the findings
B. Helps the researcher determine the causes of exploratory research
C. Enables the researcher to see a broader picture than using one method
D. Enables the research to omit steps in the research process
C
Enables the researcher to see a
broader picture than using one method.
By incorporating multiple methods to
collect marketing research data,
researchers obtain different viewpoints
of the research study. Using both
qualitative and quantitative datacollection methods, researchers can
overcome the limitations of each
method. Causes are associated with
causal research methods--not with
exploratory research. Use of multiple
methods does not impact the findings'
validity and reliability. When
researchers use multiple data-collection
methods, they are adding more steps to
the research process rather than
omitting steps.
47. The main purpose of the headline in a print advertisement is to
A. supply information.
B. identify the business.
C. attract attention.
D. express the product's benefits.
C
Attract attention. Headlines attract
attention by making a statement or
suggestion, asking a question, or giving
a benefit. Advertisers hope that readers
will then go on to read the ad's copy,
the text that supplies information about
the company and/or its products and
their benefits. The business
identification is the element of the ad
that identifies the business sponsoring
the ad.
48. Determine which of the following is a true statement about print ads:
A. Ad copy is intended to catch the reader's attention.
B. Advertisers like to use as much copy as possible.
C. Ad copy can be any length that the advertiser wants.
D. Advertisers must include the price of products in ads.
C
Ad copy can be any length that the
advertiser wants. The advertiser can
use as much copy as s/he feels is
needed to promote the product. This is
usually limited also by the amount of
money the advertiser wishes to spend.
Advertisers do not use as much copy
as possible, but use the amount of copy
that they feel is appropriate to the
product. There is no requirement that
advertisers quote the price of their
products, but many ads do include
price. The headline rather than the copy
is intended to catch the reader's
attention.
49. Why do advertisers use endorsements in their print ad copy?
A. To benefit from a user's personal experience
B. To encourage readers to take action
C. To show different uses for a product
D. To strengthen the sales message
D
To strengthen the sales message.
Endorsement copy cites a reputable
outside source such as a testing
laboratory that has certified that the
product meets certain standards. This
provides backup for the sales message.
Testimonial copy presents a user's
personal experience with the product.
Ad copy that is focused on a product's
uses will feature the different ways a
product can be used. Action copy uses
phrases such as “Come in today" to
encourage readers to take action.
50. One reason why it is important to coordinate the headline and illustrations in an
advertisement is to make the reader
A. aware of the cost involved.
B. appreciate the style of layout.
C. understand the company name.
D. want to read the message.
D
Want to read the message. The
headline and the illustrations are two of
the main elements in an advertisement.
They should be coordinated to make
the reader want to read the message in
the copy, which is the third element in
the ad. For example, the headline
should attract attention and lead the
reader to the illustration, which supports
the headline. The coordinated headline
and illustration create a desire in the
reader to want to know more about the
subject of the ad and, therefore, to read
the message. It is not important to
coordinate the headline and illustrations
to make the reader appreciate the style
of layout, understand the company
name, or be aware of the cost involved.
51. Which of the following are the elements of an advertisement that should be
coordinated to make the ad effective:
A. Illustration, layout, artwork, text
B. Copy, typeface, color, slogan
C. Headline, illustration, copy, signature
D. Signature, slogan, type size, font
51. C
Headline, illustration, copy, signature.
The four main elements of an
advertisement are the headline,
illustration, copy, and signature. These
elements should be coordinated to
make the ad effective and promote the
theme of the ad. Each element
strengthens the others and guides the
reader through the ad. Some ads
include a slogan, although a slogan is
not one of the elements. Typeface,
color, artwork, type size, and font are
parts of the layout of the ad rather than
elements of an advertisement. Text is
another term for copy.
52. What is one of the functions of certain types of public-relations activities?
A. Market segmentation
B. Product research
C. Damage control
D. Sales management
C
Damage control. In some cases,
businesses use public-relations
activities to counter negative publicity or
to respond to negative information. This
is an example of controlling the damage
that may have been caused by a
specific incident. For example, if the
media reports that a product has been
tampered with and resulted in injury to
some customers, a business would use
public-relations activities to reassure
the public that every attempt was being
made to keep the product safe. This
helps to control the negative
information and maintain good relations
with the public. Product research,
market segmentation, and sales
management are not functions of
public-relations activities.
53. Which of the following situations is an example of a public-relations activity:
A. Evan coordinates an upcoming sales promotion with the company's purchasing
manager.
B. Jana prepares a press release about her firm's new licensing agreement with a large
company.
C. Colleen telephones a prospective customer to try to schedule a product
demonstration.
D. Eli reviews a report to determine which clients have overdue payments due on their
accounts.
B
Jana prepares a press release about
her firm's new licensing agreement with
a large company. The public-relations
department is the area of the business
that is responsible for establishing good
relations between the business and the
public. Public-relations staff members
are responsible for developing and
distributing press releases. Press
releases include newsworthy
information about the business and are
provided to the media to obtain
publicity. Businesses often distribute
press releases to announce new
products, employee promotions,
mergers, awards, licensing
agreements, etc. Sales promotion is a
product-promotion activity. Calling on
prospective customers to schedule
product demonstrations is a sales
activity. Reviewing an overdueaccounts report is an accounting
activity.
54. Which of the following is the main internal audience for public-relations activities:
A. Unions
B. Suppliers
C. Employees
D. Managers
C
Employees. Most businesses provide
information to employees, the
business's main internal audience.
Providing information is a publicrelations activity because it is intended
to maintain good relations with
employees. Employees tend to work
more effectively and have higher
morale when they are well informed
and have accurate information about
the business's plans and goals.
Providing accurate information also
reduces rumors, which may have a
negative impact on employees.
Suppliers and unions are not internal
audiences although they have direct
contact with many businesses. Even
though managers are employees, they
usually are the ones who provide
information to employees. Therefore,
they are not the main internal audience.
55.One reason why it is important for businesses to use public-relations activities to
reach external audiences is to
A. measure the community response.
B. sell useful products.
C. pass on positive information.
D. compile customer databases.
C
Pass on positive information. One of
the main functions of a business's
public-relations activities is to reach
external audiences, those groups that
are outside of the company. These
groups include the local community,
government officials, customers,
suppliers, creditors, etc. The external
audience has a significant impact on
the business because customers buy
products, government officials enact
rules and regulations, and creditors
loan money. If the business does not
maintain good relations with the
external audience by providing positive
information, it may have difficulty
operating or even fail. Public-relations
activities are not intended to sell useful
products, measure the community
response, or compile customer
databases.
56. Which of the following is an example of a public-relations activity that involves
communicating with an internal audience:
A. Developing an employee newsletter
B. Holding a weekly press conference
C. Distributing a press release
D. Making a donation to a charity
A
Developing an employee newsletter. A business's public-relations efforts involve
creating and maintaining goodwill between the business and the public. There are
often many subgroups of the public with whom the business wants to maintain good
relations, such as the customers, shareholders, local residents, community
organizations, local businesses, local residents, and the business's own employees.
The business's employees are part of the business's internal audience. Maintaining
positive relationships with employees is important because employees are often
customers who buy the business's products. They also talk to their friends and family
about the business and its products. Therefore, it is important for a business's publicrelations department to develop and implement public-relations activities that affect its
employees. One activity that the public-relations staff members are often responsible
for is developing the employee newsletter. The newsletter updates the employees
about new products, community events, employee promotions, awards, etc. Press
conferences, press releases, and charity donations are activities that involve
informing the business's external audiences about the business's activities.
57. One reason why it is effective for businesses to use trade shows as a way of
communicating with their target audiences is because the consumers who attend the
shows are the
A. major competitors.
B. most likely prospects.
C. important local residents.
D. potential employees.
B
Most likely prospects. The target audience is a group of
consumers who are the most likely prospects for a good,
service, image, or idea. As a rule, only those consumers
who are interested in the products being displayed will
attend a particular trade show which is an event where
businesses display and/or demonstrate their products to
build sales leads and interest. Therefore, participating in
trade shows is an effective way for businesses to
communicate with the consumers who are the most likely
prospects to buy from the business. A business's major
competitors usually participate in the same trade shows,
but the competitors are not the target audience. Trade
shows often attract consumers from throughout the
country rather than only important local residents who may
not be part of the target audience. Consumers attending
trade shows usually are not potential employees.
58. What is a reason to give out promotional items at a trade-show exhibit?
A. To notify participants that your company will have a booth at the trade show
B. To create recall after the trade show
C. To explain the company's unique selling proposition
D. To provide industry certification for trade-show participation
B
To create recall after the trade show.
Small items such as pens/pencils and
key rings bearing the company's
contact information are often handed
out at trade shows so that potential
clients will see the company's name
again following the trade show.
Notifying participants that the company
will have a booth at the trade show is
done before the trade show begins.
Industry certification requires meeting
certain criteria such as passing an
examination and having a certain
number of years of work experience.
Explaining a company's unique selling
proposition would occur in a sales
situation in which the salesperson and
client would have more time to talk than
at a trade show. Promotional items are
also given to trade-show participants to
attract booth traffic and to provide
contact information.
59. Which of the following do businesses often consider when evaluating whether to
participate in trade shows:
A. Size of host city
B. Access to sales contacts
C. Availability of hotel accommodations
D. Distance to airport
B
Access to sales contacts. Trade shows
are events where businesses display
and/or demonstrate their products to
build sales leads and interest. A major
consideration when evaluating whether
to participate is access to sales
contacts. The business wants to have
access to its target audience, the group
of consumers who are the most likely
prospects to buy the business's
products. If many potential customers
will be attending the trade show, it
would be valuable for the business to
participate in order to have contact with
them. The size of the host city, the
availability of hotel accommodations,
and the distance to the airport are not
primary considerations when evaluating
whether to participate in trade shows.
60. A primary factor that a business considers when deciding to participate in a trade
show is the
A. business's operating policies.
B. number of expected visitors.
C. business's inventory levels.
D. cost of the concessions.
B
Number of expected visitors. Trade
shows are events where businesses
display and/or demonstrate their
products to build sales leads and
interest. A business considers many
factors when deciding to participate in a
particular trade show. Some factors that
businesses consider are the trade-show
location, travel and hotel expenses,
booth costs, target audience, and the
number of expected visitors. If the
number of expected visitors is low and
the show takes place in a distant
location, the costs of participation may
not be feasible. Operating policies,
inventory levels, and the costs of
buying food at concession stands are
not primary factors that a business
considers when deciding if it should
participate in a trade show.
61. The promotional plan of a business is based on the business's
A. financial plan.
B. marketing plan.
C. merchandise plan.
D. advertising campaign.
B
Marketing plan. The promotional plan
should be a part of the overall
marketing strategy of the business. The
financial plan is the overall budget of a
business. The merchandise plan is a
sales budget used to project a
business's sales for a product line,
department, or store. It is concerned
with buying decisions. An advertising
campaign is a series of advertisements
planned around a central theme. An
advertising campaign would be based
on the decisions made in developing
the promotional plan, such as the
budget allocated to advertising.
62. Which of the following usually is included in a business's promotional plan:
A. Timetable for completion
B. Previous sales figures
C. Table of organization
D. Projected profit margins
A
Timetable for completion. A promotional
plan is a guide for a business to follow
in promoting the company and its
goods and services. The plan usually
includes a timetable for completion. The
timetable specifies when ads will run
and when publicity efforts will take
place during the life of the promotional
plan. The timetable provides structure
for the plan. Previous sales figures, a
table of organization, and projected
profit margins are not included in a
business's promotional plan.
63. 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
D
Sending out samples of a new product
that is on display. In this situation, the
promotional activities of display 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.
64. One way a business can coordinate its promotional activities is to
A. alternate institutional and promotional ads.
B. make sure salespeople know what is being promoted.
C. watch to see what competitors are promoting.
D. include both old and new products in its promotions.
B
Make sure salespeople know what is
being promoted. In order to do a good
job of personal selling, which is a form
of promotion, salespeople need to know
what items are being promoted. Their
selling efforts can then be coordinated
with the promotions. Competitors'
promotions are promotional activities
outside the business. Promotion funds
are not usually spent on old products.
Alternating institutional and promotional
ads is not an example of coordinating
promotional activities but of using two
different forms of promotion.
65. The salesperson should demonstrate to customers only those product features that
A. interest the customers.
B. are already familiar.
C. are easy to demonstrate.
D. back up the sales dialog.
A
Interest the customers. Customers are
not interested in, nor can most of them
absorb, information about every single
feature of a product. The features that
interest the customer, and the benefits
of those features, will help to sell the
item. The sales dialog should describe
any unusual or outstanding features of
the product, but those features would
not be demonstrated if they do not
interest the customer. Choosing
features that are easy to demonstrate is
"taking the easy road" and may not
make the sale.
66. The number of items the salesperson shows the customer at one time should be
A. planned.
B. specific.
C. limited.
D. unrestricted.
C
Limited. While the number of products
shown should be limited to avoid
confusion, it does not need to be
fixed—at only two items, for example.
Showing an unrestricted, or unlimited,
number of items would be very
confusing. Customers often ask to see
certain items or additional items, but the
salesperson cannot plan what items to
show in advance.
67. An example of the use of product demonstration is
A. measuring the height of a customer.
B. preparing popcorn in a microwave oven.
C. having a customer try on a shirt.
D. handing out sale brochures.
B
Preparing popcorn in a microwave
oven. Product demonstration is the
actions of the salesperson in the sales
presentation that show the product's
features. Preparing popcorn shows
customers what the microwave oven
will do. Having a customer try on a
shirt, giving customers brochures, or
measuring a customer's height maybe
part of making a sale, but they are not
demonstrations.
68. A good way to handle a customer objection is to
A. turn the objection into a selling point.
B. smile and walk away from the customer.
C. show the customer a different product.
D. strongly disagree with the objection.
A
Turn the objection into a selling point.
An objection is a point of difference
between a customer and a salesperson
that may prevent a sale. Salespeople
should welcome customer objections
because they indicate the customer's
interest. Walking away from the
customer, showing a different product
to the customer, and strongly
disagreeing with the objection are not
be appropriate ways to handle an
objection because they could result in
lost sales.
69. The salesperson should pause before answering a customer's objections in order to
A. delay dealing with the objection.
B. show empathy for the customer.
C. get the customer's full attention.
D. let the customer see that s/he is upset.
C
Get the customer's full attention. The
salesperson should not rush to answer
customers' objections, but s/he should
not delay dealing with the objection.
Instead, s/he should make sure the
customer has finished, pause for a
minute, collect his/her thoughts, and
then respond calmly and quietly. This
helps to show the customer that the
salesperson is not upset about the
objection. Showing empathy for
customers involves letting them know
that you understand their point of view.
70. The best way to convert cost (price) objections into selling points is to sell the
__________ of the product.
A. style
B. value
C. brand
D. delivery
B
Value. Objections to cost (price) are
generally the result of a
customer's/client's concern with
receiving fair value in exchange for the
purchase price. Although style, brand,
and delivery are all factors in judging
the value of a product, the overriding
consideration is the need to justify the
price in terms of value to the customer.
71. A guideline to follow in closing sales is to
A. perfect and use one closing technique.
B. pressure the customer to buy.
C. maintain a positive attitude.
D. leave the decision up to the customer.
C
Maintain a positive attitude. A
salesperson should show interest in the
job and in customers in order to do a
good job of closing sales. Customers
should not be pressured into buying
products that they may not need or
want. This may facilitate an immediate
sale but may result in lost sales in the
long run. Salespeople should tactfully
guide the customer toward a buying
decision rather than leaving the
customer to decide alone. No one
closing technique is appropriate in all
sales situations. Salespersons should
understand the various ways to close
the sale and be prepared to use the
most appropriate close or combination
of closes.
72. Salespeople should avoid overselling because it tends to
A. help customers to decide.
B. create a positive atmosphere.
C. indicate a lack of interest.
D. interfere with buying decisions.
D
Interfere with buying decisions.
Overselling often leaves customers in a
state of indecision because too many
features or benefits are presented. This
causes sales to be lost. Overselling
creates a negative atmosphere. When
salespeople oversell, they appear more
interested in making sales than in
satisfying customer needs.
73. Salespeople should display self-confidence in closing sales in order to
A. show customers that the salespeople are not pushy.
B. show customers that the salespeople are eager.
C. gain the interest of customers.
D. reassure customers about their buying decisions.
D
Reassure customers about their buying
decisions. By displaying selfconfidence, salespeople can encourage
customers to buy and reassure
customers that their buying decision
was a good one. Customer interest
must be gained in the beginning of the
selling process in order for a closing to
take place. Displaying self-confidence
does not indicate that salespeople are
eager or being pushy.
74. Which of the following is an example of suggestion selling:
A. "That tie would be my choice."
B. "That silk tie is $28.50."
C. "This tie matches your shirt."
D. "This tie is 100% silk."
C
"This tie matches your shirt."
Suggestion selling is a sales technique
in which the salesperson attempts to
increase the customer's purchase by
suggesting additional products after the
original decision to buy has been made.
Suggesting a tie that matches a shirt
may lead the customer to buy both.
Saying which tie appeals to the
salesperson is simply voicing an
opinion. The other alternatives present
features of the ties.
75. A benefit of suggestion selling to the salesperson is that it can
A. increase the salesperson's total sales.
B. make selling more enjoyable.
C. provide important contacts.
D. prepare the salesperson to become a manager.
A
Increase the salesperson's total sales.
This enhances the salesperson's image
and may mean increased commissions
and/or greater chances of promotion.
Suggestion selling does not necessarily
provide important contacts, make
selling more enjoyable, or prepare the
salesperson to become a manager.
76. Which of the following best describes trading-up:
A. Persuading a customer to buy better quality, higher priced goods
B. Attempting to build up the total amount of the sale
C. Suggesting that the customer buy an assortment of goods
D. Using high-pressure methods to sell more
A
Persuading a customer to buy better
quality, higher priced goods. This
technique offers better service to the
customer and higher profits to the store.
Selling larger quantities and an
assortment of goods are legitimate
techniques of suggestion selling but are
not trading-up. One should not use
high-pressure methods because of the
risk of offending customers and losing
sales.
77. A salesperson can try to identify customers' personality types by
A. giving efficient service.
B. observing customers' actions.
C. serving customers quickly.
D. asking personal questions.
B
Observing customers' actions.
Observing customers' actions gives the
salesperson clues to personality type
since body language and facial
expression transmit attitudes and
feelings. Serving customers quickly and
giving efficient service are actions that
help in handling certain customer types.
Asking personal questions of customers
is inappropriate.
78. Which of the following is characteristic of an impulsive customer:
A. Comparison shops
B. Asks many questions
C. Selects products quickly
D. Challenges salesperson
C
Selects products quickly. Impulsive
customers usually buy on the spur of
the moment. They usually don't want a
lot of information when shopping and
do not challenge the salesperson with a
lot of questions. They generally buy to
satisfy inner needs and wants, select
their items rather quickly, and want their
purchases to be noticed.
79. Which of the following actions would you take if a customer has a fact-finder
personality:
A. Stress the product's value.
B. Consider the customer a challenge.
C. Suggest product care techniques.
D. Suggest substitutes with caution.
C
Suggest product care techniques. These
customers want to know as much as
possible about the product before they
purchase. That would include how to care
for the product. The decisive customer
wants the product right away and may
object to a substitute. The difficult customer
is looking for problems and should be
considered a challenge. The practical or
frugal customer wants to get his/her
money's worth and looks for value.
80. Which of the following is a buying decision customers must make before making a
purchase:
A. When was the product introduced?
B. How many businesses sell the product?
C. Who already owns the product?
D. What brand or style would be best?
D
What brand or style would be best? The
final decision to purchase a good or
service will not occur until several types
of buying decisions have been made by
the customer. Customers must decide
why, where, and what type of product to
purchase, as well as how much to pay
for the item and when it should be
purchased. The identity of other owners
of the product, the number of
businesses that sell the product, and
the length of time the product has been
on the market could affect buying
decisions, but they are not buying
decisions.
81. Which of the following affects the place decision:
A. Product features and benefits
B. Need for additional information
C. Warranty
D. Business loyalty
D
Business loyalty. Loyalty to a business
can affect a customer's place decision.
Warranty usually affects the price
decision. The need for additional
information usually affects the time
decision. Product features and benefits
usually affect the product decision and
the price decision.
82. Which of the following factors affects the customer's time decision:
A. Need for additional information
B. Loyalty to the business
C. Warranty terms
D. Availability of customer service
A
Need for additional information. The
need for additional information can
affect a customer's time decision.
Customers may delay making the
decision to buy if they feel they need
additional information about the
product. As a salesperson, you should
help customers make the decision to
buy now by providing additional product
information. Warranty terms and
customer service usually affect the
price decision. Loyalty to the business
usually affects the place decision.
83. An important function of using probing in a selling situation is to
A. identify the customer's needs/wants.
B. prevent any objections.
C. spend more time on the sale.
D. distract the customer.
A
Identify the customer's needs/wants.
Probing can help salespeople to identify
customers' needs, wants, buying
motives, and problems. The
salesperson should use this information
to offer solutions or ideas that his/her
company or product can provide.
Probing helps to focus the customer's
attention, not to distract him/her. It also
helps to reduce the time spent making
the sale. It is not possible or desirable
to prevent any objections from arising
since identifying the customer's real
objections may enable the salesperson
to overcome them.
84. What is a company/salesperson benefit of using probing in a sales presentation?
A. The customer feels important.
B. Less time is needed to make a sale.
C. The customer feels reassured.
D. Product returns are increased.
B
Less time is needed to make a sale.
Salespeople use probes to obtain
information, involve customers, and
uncover objections. This technique allows
salespeople to resolve problems that
customers may have with the company, its
policies, or its products. As a result, it'll
take salespeople less time in the long run
to close a sale. The customer's feelings of
importance and reassurance are customer
benefits of probing. Product returns are
decreased, rather than being increased,
through the use of probing.
85. What type of probe should be used to determine what the customer is thinking?
A. Opinion-gathering
B. Information-gathering
C. Closed-end
D. Confirming
A
Opinion-gathering. These probes
involve customers in the sales
presentation so that salespeople can
determine customers' reactions to what
has been said and elicit their
comments. Opinion-gathering probes
can be used throughout the
presentation to let salespeople know
whether they are on target with the
information that they are presenting.
Confirming probes are used to check
for understanding or accuracy.
Information-gathering probes enable
salespeople to find out information
about their customers that will be
helpful in satisfying customer needs. To
determine what a customer is thinking,
it's better to use open-ended probes
rather than closed-end ones.
86. A salesperson's ability to thoroughly explain a product's benefits is particularly
important when selling products with __________ benefits.
A. unique
B. apparent
C. hidden
D. exclusive
C
Hidden. Hidden benefits are the
advantages of goods or services that
are not recognizable unless pointed out
by the salesperson. Salespeople may
not be able to effectively sell products
with hidden benefits unless they can
explain them thoroughly. Apparent
benefits are the easily recognizable
advantages of a good or service.
Unique or exclusive benefits are the
only one of its kind, or exclusive,
benefits a competitor's goods or
services do not possess.
87. A salesperson has explained a product's features and benefits that appeared to be of
interest to the customer. What should the salesperson do if the customer reacts
negatively?
A. Hand the customer promotional materials and walk away
B. Accept the fact that the sale has been lost
C. Ask additional questions and explain other features and benefits
D. Proceed with the sales presentation
C
Ask additional questions and explain other features and benefits. If
a customer is not sold on the benefits of a product, it could mean
that the salesperson misinterpreted the customer's interests and
desires. The salesperson might need to ask additional questions
and explain other features and benefits that would appeal to the
customer, and change a negative reaction to a positive one.
Proceeding with the sales presentation would be appropriate if the
salesperson observed that the customer was reacting favorably.
Handing the customer promotional materials and walking away
would result in a possible loss of a customer. A salesperson should
point out additional features and benefits rather than accepting that
the sale has been lost.
88. In order to effectively sell to an individual, what should a salesperson do after
recognizing that the individual has a need?
A. Develop a brochure
B. Arrange financing
C. Provide information
D. Sell a product
C
Provide information. To sell effectively, salespeople should provide the
information about a good or service that will satisfy the individual's
needs. If individuals already know what they need, the salesperson
may only need to show them the product and answer a few simple
questions. However, if the individuals are not sure about what they
want, a salesperson may need to provide a lot of information about
price, benefits, uses, warranties, etc. Providing the right information
will help make the sale. Only when individuals have all the information
they need, will the salesperson be able to sell a product. After an
individual decides to buy, a salesperson might offer to arrange
financing. Brochures may be used to provide information, but they are
prepared in advance.
89. Which of the following is a barrier that a salesperson might encounter when selling to
an individual:
A. Buyer asks for additional information.
B. Buyer does not see a need for the product.
C. Buyer wants to see a product demonstration.
D. Buyer does not accept phone calls during meetings.
B
Buyer does not see a need for the
product. In some cases, a salesperson
might be unable to convince a customer
that the product will satisfy a need or
solve a problem. If the buyer does not
see a need for the product, it may be
impossible for the salesperson to make
a sale. To overcome this barrier, a
salesperson might need to change the
presentation or style of selling to help
the customer see the value in the
product. Asking for additional
information or wanting to see a product
demonstration are indications of
interest rather than barriers. A buyer
who does not accept phone calls during
meetings will be able to concentrate on
the sales presentation and not be
distracted.
90. A salesperson who has been negotiating sales terms with a client feels that the
client's terms would be harmful to her/his company's well being. What action should the
salesperson be prepared to take?
A. Stress the product's benefits
B. Accept the client's terms to make the sale
C. Continue to negotiate with the client
D. Walk away
D
Walk away. When salespeople
negotiate sales terms, they need to be
prepared to walk away from the sale if
they feel the terms will be detrimental to
themselves or to their company. When
negotiating, both parties need to “win”-not just one party. Salespeople want to
establish long-term relationships with
their clients, so they want to keep the
client happy but not harm her/his
company. Product benefits would have
been stressed earlier in the sales
process--the client understands those
benefits by the time s/he is ready to
negotiate. Continuing to negotiate when
the outcome will damage the company
tends to waste the time and effort of
both parties.
91. At the beginning of a sales negotiation, you've quoted your initial price. The customer
follows up by asking for your best price. You know that you can discount your starting
price by 15%. What is the most appropriate price for you offer?
A. The initial price less 2%
B. The initial price less 15%
C. The initial price less 10%
D. The initial price
•
A
The initial price less 2%. The customer expects to
negotiate the price. If you immediately discount the price
as much as you can, the customer will expect to get an
even larger discount. When you can't give a larger
discount at the beginning of the negotiation, the customer
will be unhappy. Therefore, salespeople should start small
with the amount of discount quoted so that in the end the
customer will be happy with the price s/he paid, and your
company will make the best deal possible.
92. Why do companies provide sales standards to their salespeople?
A. To ensure that salespeople adhere to the company's sales policies
B. To identify the sales quotas that salespeople are required to meet
C. To designate the sales territories in which the salespeople are permitted to sell
D. To provide structure for salespeople to follow without stifling their personalities
D
To provide structure for salespeople to
follow without stifling their personalities.
Sales standards are best practices and
minimum operating procedures that
companies provide their salespeople so
that salespeople know the companies'
expectations for their salespeople. Since
sales standards identify minimum
operating procedures, salespeople are still
able to use their creativity and personalities
to make sales. Some companies include
sales quotas in their sales standards;
however, sales standards are not limited to
quotas. Sales standards are not related to
sales territories. Sales standards and sales
policies are not the same thing. Policies set
the broad limitations on the activities of
salespeople, while sales standards are
best practices for salespeople to follow.
93. Mountain Bike Manufacturers has found that salespeople who confirm their salescall appointments the day before their sales presentations have a 60% higher close rate
than salespeople who do not confirm sales visits. This finding has led Mountain Bike
Manufacturers to recommend pre-sales visit confirmation contacts to its new hires. This
is an example of a sales
A. promise.
B. cycle.
C. standard.
D. quota.
C
Standard. Sales standards are best
practices based on lessons learned that
serve as guidelines to provide structure
to sales activities. In this situation,
Mountain Bike Manufacturers had
learned that pre-sales contacts
appeared to have some relationship
with being able to close sales. By
recommending pre-sales contacts, the
company was providing structure to
sales activities. A sales cycle is the time
between an initial customer contact and
the sales close. A sales promise is a
guarantee given customers about the
benefits to be obtained from purchasing
a product. A sales quota is the amount,
types, or value of sales that a
salesperson is expected to make during
a designated time period.
94. What is often an effective technique for a salesperson to use when selling goods and
services to groups?
A. Encourage interaction
B. Question each participant
C. Avoid summarizing
D. Discuss many topics
A
Encourage interaction. Selling to
groups is often more difficult than
selling to one person because of the
number of people involved in making
the buying decision. One way for a
salesperson to effectively sell to a
group is to encourage interaction
among the members of the group. The
salesperson can encourage interaction
by opening up the discussion and
giving each member an opportunity to
participate. A salesperson should be
tolerant of all points of view and keep
dominant members from taking control
of the conversation. A salesperson
should follow an agenda and focus on a
few main topics. It is not realistic to try
to question each participant in the
group. Frequent summaries help the
group to draw conclusions and move on
to the next point.
95. Which of the following is an appropriate guideline for salespeople to follow in selling
to a group:
A. Try to keep group members from interrupting with questions
B. Avoid the use of visual aids during the presentation
C. Explain product benefits without emphasizing one over others
D. Focus the sales presentation on the group's leader
C
Explain product benefits without
emphasizing one over others.
Salespeople should keep in mind when
selling to a group that each individual in
the group has different buying motives.
While the product's benefits should be
thoroughly explained, it is best not to
emphasize any one benefit because
different benefits will be important to
different members of the group. The
presentation should not be focused on
the group leader but should address all
members equally. Visual aids are very
effective and frequently used in
presentations to groups. In most cases,
salespeople should encourage group
members to interrupt with questions.
96. By observing customers' facial expressions during a sales presentation, you can
learn
A. to be empathetic with customers.
B. their style preferences.
C. which selling points appeal to them.
D. their mannerisms.
C
Which selling points appeal to them. By
observing customers' facial expressions
during a sales presentation, you can
learn which selling points appeal to
them. Expressions of satisfaction,
interest, doubt, or disapproval will guide
you toward the appropriate sales
presentation. You can see from
customers' mannerisms whether they
are relaxed or uneasy--how they feel in
general. Observing customers' actions
gives you insight into style preferences.
Empathizing is one way to demonstrate
interest in the customer.
97. How do customers benefit from the effective use of buying motives in selling?
A. They become repeat customers.
B. They tell others about the business.
C. Their needs and wants are satisfied.
D. Their merchandise returns decrease.
C
Their needs and wants are satisfied. When salespeople
determine and use customer buying motives in selling,
customers' needs and wants are satisfied. Decreased
merchandise returns, telling others about the business,
and becoming repeat customers are benefits to the
business.
98. Because of the high interest rates charged on retail credit, the Andrews family
decided to pay cash for purchases. Which of the following affected their decision:
A. Opinions of friends
B. Season of the year
C. Educational level
D. Economic conditions
D
Economic conditions. Consumers'
wants, needs, and buying decisions are
frequently affected by the condition of
the economy. When inflation,
unemployment, or interest rates are
high, for example, customers may delay
buying. Educational level, seasons of
the year, and opinions of friends are not
involved in this situation.
99. Which of the following is a reason why it is important for a salesperson to accurately
complete sales forms:
A. To provide delivery instructions
B. To calculate shipping charges
C. To maintain customer confidence
D. To identify seasonal merchandise
C
To maintain customer confidence. It is
absolutely essential for salespeople to
accurately complete sales forms
because those are important
documents to most businesses
engaged in selling. The information on
sales forms needs to be accurate in
order to charge the customer the
correct amount. Customer confidence
and goodwill can be harmed severely if
a salesperson overcharges customers
or charges customers for items they
don't receive. Not all sales forms
contain information about delivery
instructions or shipping charges,
although, if needed, this information
should be accurate. It is not important
for a salesperson to accurately
complete sales forms in order to identify
seasonal merchandise.
100. Which form does a salesperson need to process for a customer who is purchasing
a photocopier and paying for it over an extended period of time?
A. Bill of lading
B. Warranty
C. Credit
D. Service contract
C
Credit. Once a technical salesperson closes a sale, s/he must often
work with the customer to complete forms and process the order. In
many cases, customers cannot afford to pay upfront the total
amount due for expensive products (e.g., photocopiers). Depending
on the business's policies and the customer's financial needs, the
salesperson may help the customer secure a line of credit to pay for
the photocopier. Credit is the arrangement by which businesses or
individuals can purchase now and pay later. The salesperson might
need to help the customer complete a credit application and
forward the documentation to the appropriate person to process the
credit request. A warranty and a service contract might require a
salesperson to process the paperwork, but do not directly relate to
the payment plan for the actual product. A bill of lading is a contract
between a shipper and a transportation company.