Chapter 3 Test

Question 1

What is the name of the rule that says “a small number of of customers account for the majority of the profit. 80% of the profit comes from 20% of the customers?

Answer 1

80-20 Rule

Question 2

What is the segment that is composed of a retailers most loyal customers?

Answer 2

Platinum segment

Question 3

20% of the customers make up this segment.

Answer 3

Gold segment

Question 4

Customers that are price conscious is called the?

Answer 4

Iron segment

Question 5

What is used by managers to gauge how well the store and each department are operating?

Answer 5

Financial Reports

Question 6

Represents percentages or proportions where the entire portion represents 100% and each smaller portion represents a piece of the 100%

Answer 6

Pie charts

Question 7

What is it when “some retailers match competitor’s prices if it can be proven in a sales ad or coupon. This helps the customer to get the best price.”?

Answer 7

Price matching

Question 8

What is the general rule in retail stores?

Answer 8

The customer is always right.

Question 9

What is used to compare information?

Answer 9

Bar graphs

Question 10

What is the actual number of sales transactions made?

Answer 10

Total number of Transactions

Question 11

What is the total number of items within each transaction?

Answer 11

Units per transaction

Question 12

graphs that show how data changes over a period of time

Answer 12

Line graphs

Question 13

this is the price the customer is willing to pay for the product or service based on what the purchase will give them

Answer 13

Price sensitivity

Question 14

15. What is an ad-

Answer 14

a. Regular priced merchandise- new items, latest trends
b. Sale merchandise- retailers run sales as a way to get customers into the store.
c. Clearance merchandise- reduced priced items the retailer no longer wants.

Question 15

the best means of advertising

Answer 15

Word of Mouth

Question 16

this is the lowest segment and can actually cost the company money

Answer 16

Lead segment

Question 17

it is necessary to keep records on your customers to better them

Answer 17

Customer records

Question 18

customers receive special offers or rewards by shopping at their store, staying at their hotels, or flying their airlines.

Answer 18

Loyalty Program

Question 19

Client records should include the following basic information

Answer 19

a. Name
b. Address
c. Telephone Number(s)
d. Occupation (or hobbies, collections, activities, projects, or other interest that influence buying preference.

Question 20

when a person recommends a store or sales person based on his or her experience

Answer 20

Referal

Question 21

How retailers tell customers about their sales and promotions

Answer 21

a. Coupons
b. Newspaper ads
c. Flyers and Circular
d. Television or radio ads
e. Special events
f. Online ads and sales

Question 22

19. When pricing items, retailers must consider the following?

Answer 22

a. What price would be considered so expensive that customers would not buy it?
b. What price would be too low so that the customer would feel the quality couldn’t be very good?
c. What price would be considered starting to get expensive, but not out of the question? The customer would have to give it some thought.
d. What price would the customer consider the item to be a bargaining

Question 23

If an item goes on sale, make sure that

Answer 23

a. The advertised sale price comes up when the item is scanned.
b. The correct price is shown on the shelf signage.
c. The price tags reflect the price change.

Question 24

Retailers with websites may charge different prices for online purchases than for those made in the store

Answer 24

True