Customer Relations
What type of business policy is designed to attract customers by making the purchasing experience more
convenient for them?
A. Flexible
B. Employee
C. Product
D. Service
D
Service. Service policies are guidelines affecting the kinds of special activities, such as delivery and
installation, that businesses offer customers. Service policies are designed to attract customers away
from the competition and to make the purchasing experience more convenient and pleasurable so that
the customers will return again and again. Employee policies are guidelines explaining how employees
are to act and how they are to deal with customers. Product policies are guidelines affecting the kinds of
goods and services that businesses offer to customers. Flexible policies are rules or guidelines that can
be easily changed or deleted.
Which of the following is an example of excess demand:
A. Price = $500, demand = 500, supply = 500
B. Price = $400, demand = 600, supply = 400
C. Price = $600, demand = 400, supply = 600
D. Price = $700, demand = 300, supply = 700
B
Price = $400, demand = 600, supply = 400. Excess demand exists when the demand is greater than the
supply. At the $400 price, demand exceeds supply by 200 (600 - 400 = 200). $500 is the price at which
supply and demand are equal. At the prices of $600 and $700, supply is greater than demand, and there
is an excess supply.
Why is it important for businesses to monitor customer purchases?
A. To satisfy consumers' needs and wants
B. To block consumers' economic votes
C. To promote slow-selling merchandise
D. To classify their products
A
To satisfy consumers' needs and wants. Businesses are more successful when they offer products that meet consumers' needs and wants. Businesses would not want to promote slow-selling merchandise or prevent consumers from purchasing products. Products are classified before they are marketed to enable marketers to plan their marketing activities.
Providing marketing information is an important channel activity. Businesses rely on marketing
information to determine
A. how intermediaries are performing.
B. their target markets' needs and wants.
C. how much to charge for their products.
D. what to name their products.
2. B
Their target markets' needs and wants. Businesses rely on marketing information to determine their target markets' needs and wants. Intermediaries are often able to provide producers with valuable marketing information since they deal with final consumers more closely. Marketing information may or may not help businesses determine how intermediaries are performing, how much to charge for their products, or what to name their products.
Which of the following categories of information are found on a balance sheet:
A. Assets, liabilities, owner's equity
B. Income, expenditures, profit
C. Assets, liabilities, margin
D. Revenues, expenses, profit
A
Assets, liabilities, owner's equity. A balance sheet is a financial statement that captures the financial
condition of the business at that particular moment. The statement first lists assets, anything of value that
a business owns; then liabilities, or debts that the business owes; and finally owner's equity, or the
amount the owner has invested in the business, plus or minus profits and losses. Revenues, or income;
expenses, or expenditures; and profit are components of an income statement, or profit-and-loss
statement. Margin is a term that describes the difference between net sales and cost of goods sold.
Salespeople sometimes have difficulty meeting the needs of customers who are
A. agreeable.
B. silent.
C. decisive.
D. patient.
B
Silent. Silent customers are shy, insecure, or too sensitive to talk very much even when they need help.
The salesperson may have difficulty meeting the needs of this kind of customer because it is hard to
identify those needs. Customers who are patient, agreeable, and decisive are much easier to help.
Who owns a good if the good is used in performing a service for a customer?
A. The business performing the service
B. The customer who buys the service
C. The producer of the good
D. The supplier of the good to the business
A
The business performing the service. Service businesses perform intangible activities that satisfy the
wants of consumers and industrial users. If a good is used in performing the service, its title, or
ownership, is not given to the customers but is retained by the business performing the service. The
customer receives the service, but the business owns the good. For example, a car-rental business
leases the use of a car to a customer for one week. The business owns the car, while the customer
simply buys the use of the car. The business retains ownership of the good, not the producer that made
the good or the supplier that sold the good to the business.
Natural resources are provided by nature, and capital resources are provided by
A. machinery.
B. people.
C. technology.
D. automation.
B
People. Capital resources include the equipment and machinery that are actually used to produce goods and buildings, supplies, roads, and ports that enable producers to operate businesses and to make goods available to consumers. Machinery is a type of capital resource. Technology is scientific applications to business objectives or the methods used to attain those objectives. Automation is the use of robots or other automatic equipment to do certain tasks.
A farmer with a produce stand in the yard is an example of a __________ distribution channel.
A. producer to retailer to consumer
B. producer to agent to consumer
C. producer to consumer
D. producer to wholesaler to consumer
C
Producer to consumer. When goods are sold directly from the producer to the consumer, this is a direct channel of distribution. All of the other alternatives involve one or more intermediaries between the producer and the consumer. These are examples of indirect channels of distribution.
Which of the following is an example of helpful, printed information that businesses often give new
employees during orientation:
A. Promotional brochure
B. Annual report
C. Application form
D. Company handbook
D
Company handbook. Many businesses develop company handbooks that they give to new employees
during the orientation process. The handbooks usually contain information about company policies and
procedures and employee benefits and responsibilities. The information in the handbook answers many
of the questions that new employees often have about the company. Annual reports and promotional
brochures do not contain the type of business information that is useful to new employees. Application
forms are completed before employees are hired and begin the orientation process.
How can the salesperson try to reduce the number of customer complaints about the products customers
buy?
A. By using high-pressure selling techniques
B. By identifying the customer's real needs
C. By approaching customers as soon as possible
D. By advising the customer from personal experience
B
By identifying the customer's real needs. Product-related complaints often occur when customers make
improper buying decisions. Salespeople should try to identify the customer's real needs so that s/he can
suggest the most appropriate product. High-pressure selling techniques are never recommended and
would likely cause complaints. Salespeople may not be able to advise from personal experience in all
cases, and their advice may not be appropriate for the particular customer. Approaching customers
promptly is a good idea but will not prevent them from having product-related complaints.
Which of the following is a function that is an important part of the human resources management
activities of business:
A. Promoting
B. Pricing
C. Selling
D. Staffing
D
Staffing. Human resources management is the process of planning, staffing, leading, and organizing
employees. Staffing is an important part of human resources management and includes all the activities
necessary for the recruiting, hiring, and training of the people who work to produce goods and services.
People are a business's most important resource; therefore, effective staffing is a vital aspect of the
business. Without competent and satisfied employees, businesses would not be able to perform their
primary functions. Pricing, promoting, and selling are marketing activities.
What might cease if producers decide that their incomes are inadequate to continue making goods and
services?
A. Consumption
B. Competition
C. Compensation
D. Communication
A
Consumption. Consumption is the process or activity of using goods and services. If producers decide that their incomes are not adequate, they may choose not to make goods and services. If goods and services are not available, consumption would cease. Competition is rivalry between two or more businesses to attract customer dollars. Competition is good for the economy because it helps strong businesses to thrive and prosper and make more goods and services available for consumption. Compensation is wages, salary, incentives, and benefits offered to employees. Communication is an exchange of information in which the words and gestures are understood in the same way by both the speaker and the listener.
An advantage of using satellite tracking technology in distribution is that it enables businesses to
A. analyze the contents of packages.
B. know where shipments are at all times.
C. determine the delivery drivers' qualifications.
D. obtain information about competitors.
B
Know where shipments are at all times. Satellite tracking technology is based on the use of orbiting
satellites, and enables businesses to monitor the location of delivery trucks. Once a shipment is placed
on a truck, the shipment can be tracked by satellite so businesses know where the shipment is at all
times. This technology makes it possible for businesses to tell customers exactly where the shipment is
and when it will be delivered. Satellite tracking technology does not enable businesses to analyze the
contents of packages, determine the delivery drivers' qualifications, or obtain information about
competitors.
Using the cash accounting method, determine the amount of sales that a business would record for one
day if it makes $2,300 in cash sales, has COD sales of $450, and places a $300 special order.
A. $2,300
B. $2,600
C. $2,750
D. $3,050
A
$2,300. The cash accounting method involves recording income at the time the money changes hands.
In other words, the business enters the amount of a transaction into its records on the day the money is
received from the customer. If the customer doesn't pay for the item until a later time, the sale is not
recorded until that date. A business using the cash accounting method would record only the $2,300 that
it makes in cash sales that day. It would record the $450 in COD sales when the items are delivered and
the amount due is collected from the customers. The business would record the $300 special order after
the order arrives and the customer pays for and picks up the order.
There are several auto repair shops in town, but Patricia's stands out. Her auto repair shop does great
work, but what really sets her shop apart is the customer service. Every customer is greeted by a friendly
employee, and s/he is given snacks and drinks while s/he waits for the repairs to be completed. The
great customer service that people can expect from Patricia's business is considered her
A. tagline.
B. brand promise.
C. vision.
D. mission statement.
B
Brand promise. A business's brand promise is its (spoken or unspoken) agreement with its customers
that it will consistently meet their expectations. When Patricia's customers visit her business, they know
they'll receive outstanding customer service every time. A brand promise should go above and beyond
goods and services and focus on something other businesses don't offer. For example, the other auto
repair shops in town may do repairs that are just as good, but it's Patricia's outstanding customer service
that sets her apart. A tagline is a company's slogan. Taglines often change based on marketing
campaigns and cultural shifts, but a company's brand promise is permanent. A vision is the future a
business desires to create. Providing great customer service may be part of Patricia's vision, but that
alone is not a vision. A mission statement is a brief summary of what a business owner wants to be
doing. This is not the same as a brand promise.
Which of the following types of economic systems would offer the most benefits to business owners and
to their employees:
A. Market
B. Socialist
C. Communist
D. Traditional
A
Market. A market economy is an economic system in which the means of production and distribution are
owned and controlled by individuals and businesses. Such a system benefits both workers and owners
because they can use their profits and wages in their own best interests. Although wages and profits
motivate workers and business owners in socialism, high taxes and high prices reduce the effectiveness
of this incentive. A communist government controls the people because it controls the economy. A
traditional economy is based on traditions passed down from one generation to the next. People
consume all that they produce in an attempt to satisfy their basic needs for food and shelter.
T-shirts sold at music concerts that are imprinted with a rock group's name are examples of products that
have __________ utility.
A. service
B. form
C. price
D. intangible
B
Form. Form utility is usefulness created by altering or changing the form or shape of a good to make it more useful to the consumer. Form utility applies only to tangible goods such as T-shirts. By imprinting a rock group's name on the shirts, sellers are altering the shirts to make them more appealing to customers. Service, intangible, and price are not types of utility.
Why are Universal Product Codes (UPCs) often preprinted on products before the manufacturer ships
the products to the business?
A. To reduce the possibility of theft
B. To increase the product turnover rate
C. To simplify the price-marking function
D. To improve the transportation system
C
To simplify the price-marking function. The Universal Product Code (UPC) label is encoded with product information such as price, brand, size, etc., to be read by an electronic scanner. Technology allows manufacturers to preprint this data on packages before shipping them to businesses. The preprinted data simplify the price-marking function because the business does not need to mark a price on each product. The UPC data contain the necessary pricing information. Preprinting UPCs on products does not increase the product turnover rate, reduce the possibility of theft, or improve the transportation system.
The administration of assets refers to decisions about
A. spending.
B. accounting.
C. investments.
D. financing.
C
Investments. The administration of assets refers to decisions about investments. Each company has
assets—things it owns that are of value. Financial managers are responsible for determining what types
of assets the company should own, as well as the proper mix of those assets. Financial managers do not
necessarily make decisions about accounting. They do make decisions about company spending, but
this is not necessarily involved in the administration of assets. Financing decisions are referred to as the
acquisition of funds.
When Mr. Schwarz's order did not arrive at the expected time, he called Karl, the salesperson with whom
he had placed his order. Karl apologized for the delay and told Mr. Schwarz that he would check into the
issue. After Karl talked with the transportation company, he immediately called Mr. Schwarz to let him
know where the order was and when to expect delivery. Mr. Schwarz thanked Karl for getting back with
him so quickly. In this situation, Karl reinforced the company's image by
A. delegating work tasks.
B. giving vague answers.
C. providing efficient follow-up.
D. complimenting the customer.
C
Providing efficient follow-up. Customers often base their impressions of a business on the interactions
they have with the business's employees. In the situation provided, Karl worked quickly to find out the
status of the order and immediately called Mr. Schwarz with specific information about where the order
was and when to expect delivery. This is an example of efficient follow-up. By providing efficient service,
Karl is building favorable relationships with customers. There is not enough information provided to
determine if Karl delegated work tasks to facilitate his follow-up activities or if he complimented Mr.
Schwarz.
The differences in the education and skills of the workforce are reasons why market economies usually
experience
A. unequal income distribution.
B. low unemployment levels.
C. unpredictable taxation rates.
D. minimal profit margins.
A
Unequal income distribution. A market economy or free enterprise economy is an economic system in
which individuals and groups, rather than the government, own or control the means of production—the
human and natural resources and capital goods used to produce goods and services. One problem that
market economies experience is unequal income distribution. Some people own a lot of property, while
others own little or none because they don't have the money to buy it. This occurs because workers with
higher levels of education, training, skills, and efficiency generally receive higher salaries than less
qualified workers. Unemployment fluctuates in market economies—sometimes unemployment levels are
low and sometimes they are high, depending on the stage of the business cycle. The government sets
the taxation rates, which vary by jurisdiction or where people live and work. A market economy allows the
freedom for individuals and businesses to make a profit, but a particular business's goals and sales
influence the profit margin the business makes.
What type of market likely exists when a local automobile dealer has many cars for sale at low prices but
demand is low?
A. Elastic
B. Buyer's
C. Seller's
D. Inelastic
B
Buyer's. A buyer's market is the best time for buyers to buy. It is characterized by large supply, small demand, and low prices. A seller's market is characterized by large demand, small supply, and high prices. Elastic is not a type of market but a type of demand that changes according to changes in price. Inelastic is not a type of market but a type of demand in which changes in price do not affect demand.
The development of goods and services that best satisfy consumer needs and wants is a major goal of
A. financing.
B. purchasing.
C. product/service management.
D. marketing-information management.
C
Product/service management. This marketing function involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities. Financing is not a marketing function but a business function that involves understanding the financial concepts used in making business decisions. Purchasing is a business activity rather than a marketing function. Marketing- information management involves gathering, accessing, synthesizing, evaluating, and disseminating information for use in making business decisions.
Which of the following is a true statement about B2B (business-to-business) marketing:
A. B2B marketing strategies work well for consumer marketing, but consumer strategies don't work
for B2B.
B. Only specialty marketing firms undertake B2B marketing.
C. B2B marketing is more difficult than consumer marketing.
D. Marketers approach B2B marketing differently than consumer marketing.
D
Marketers approach B2B marketing differently than consumer marketing. Because business customers
are different from individual consumers, marketers must approach them in ways that are appropriate for
their unique needs. Many companies market to business customers, not just specialty firms. B2B
marketing is not necessarily more difficult than consumer marketing, just different. Some B2B and
consumer marketing strategies may overlap; one is not necessarily better than the other for using on the
"opposite side."