Deck 13: Buying Merchandise

Question 1

How will selling a national brand lower a retailer's promotional expenses for that product?

A)Manufacturers pay to promote their own brand.
B)The products are of better quality than private labels attracting consumers.
C)Manufacturers will budget less for promotions because the products are already branded.
D)Manufacturer will pay the retailer to carry the brands.

Answer 1

A
Explanation: Since national brands already spend quite a bit on promoting their brand,retailers have less of a need to promote the product themselves.

Question 2

____________ offers the consumer a private label that is comparable to,or even superior to,a manufacturer's brand quality,sometimes with modest price savings.

A)Premium branding
B)Exclusive branding
C)Copycat branding
D)Exclusive co-branding
E)Licensed branding

Answer 2

A
Explanation: Premium private-label brands offer the consumer a private label that is comparable to a manufacturer's brand quality,sometimes with modest price savings.

Question 3

All of the following are terms for products developed by retailers EXCEPT ________.

A)store brands
B)private-label brands
C)house brands
D)own brands
E)manufacturer brands

Answer 3

E
Explanation: Manufacturer brands are designed,produced and marketed by a vendor and sold to many different retailers.

Question 4

A buyer asks or receives something of value that influences their purchasing decisions.This occurs in the Black Market.

Question 5

Copycat brands imitate the manufacturer's brand in appearance and packing,generally are perceived as lower quality,and are offered at lower prices.

Question 6

In a Dutch auction,the retail buyer provides a specification for what they would like to be produced for their private label products and then manufacturers bid on the opportunity to be the supplier.

Question 7

Bonuses are funds vendors give retailers to cover lost gross margin dollars due to markdowns needed to sell unpopular merchandise.

Question 8

A(n)___________ is a brand that is developed by a national brand vendor,often in conjunction with a retailer,and is sold exclusively by the retailer.

A)premium brand
B)generic brand
C)copycat brand
D)exclusive brand
E)licensed brand

Question 9

National brands are also called _______________ brands.

A)generic
B)private-label
C)exclusive
D)manufacturer
E)distributor

Question 10

There is a growing trend for retail chains to stock more national brand rather than private label brands.

Question 11

After creating an assortment plan for the product category,planning the budgets that include the forecasted sales and inventory levels,the next step in the merchandise management process is ___________.

A)creating the planograms
B)creating the advertising and promotional calendar
C)shopping the competition
D)procuring the merchandise
E)budgeting for employee labor

Question 12

Gerber baby food,Lubriderm moisturizer,Dell computers,and Harley Davidson motorcycles are all examples of _______________ brands.

A)private-label
B)national
C)general
D)generic
E)licensed

Question 13

Due to the increase in production of private label,resident buying offices have become increasingly more significant and important.

Question 14

By selling national brands,a retailer can help build store image,increase traffic flow and reduce promotional expenses.

Question 15

Walgreens and CVS brands are placed next to the manufacturer's brands in the store,and they often look like them.This kind of brand is called _______.

A)premium brand
B)generic brand
C)copycat brand
D)exclusive brand
E)licensed brand

Question 16

Diverted and gray-market goods are legitimate merchandise however the products go through distribution channels that are not authorized or intended by the manufacturer.

Question 17

Credible commitments are tangible investments in the strategic relationship and involve spending money to improve the supplier's products or services provided to the customer.

Question 18

Slotting allowances are charges imposed by a retailer to stock a new item.

Question 19

Which the following type of brands would a retailer normally expect to get the lowest gross margin percentage?

A)exclusive brands
B)unique brands
C)national brands
D)generic brands
E)private-label brands

Question 20

Why do department stores organize some of their private label products near national brands?

A)Vendors require department stores to merchandise their products this way.
B)It is only ethical for retailers to balance their assortment with both national and private label merchandise.
C)National brands are much more profitable for the retailer than the private brands.
D)The known national brands attract customers into the department.
E)Sales are unpredictable and retailers prefer a sure thing with national brands.

Question 21

The only retailer that Tommy Hilfiger apparel is available at other than the manufacturer's own outlet stores is Macy's.This is an example of a/an:

A)generic brand.
B)private-label brand.
C)exclusive brand.
D)premium private label.
E)copycat brand.

Question 22

Why are inventory carrying costs higher for retailers who source internationally?

A)Lead times are longer so there is a need to maintain higher levels of safety stocks.
B)There is no way to predict the extra tariffs that will be levied by importing countries.
C)Labels of origin are typically put on products and need to be removed upon arrival.
D)Changes in fixed costs result in additional inventory.
E)Foreign distribution centers charge higher storage fees.

Question 23

Which of the following does NOT describe an approach for buying national brand merchandise?

A)Buyers meet national brand vendors in wholesale market centers.
B)Buyers attend trade shows to see the latest products and styles.
C)Buyers using reverse auctions.
D)Buyers discuss the performance of the vendor's merchandise during the previous season during market weeks.
E)Vendors meet with buyers at their offices to review and reorder last week's best sellers.

Question 24

Why are retailers interested in reducing tariffs?

A)Retailers are concerned about the fate of US manufacturers.
B)Retailers want to spend more on expansion.
C)Retailers want to work with the Euro rate,but the tariff prohibits the gesture.
D)Tariffs cheapen the imported merchandise.
E)Tariffs increase the cost of merchandise.

Question 25

Which of the following does NOT describe reverse auctions?

A)Retail buyers provide a group of potential vendors with a specification for what they want.
B)There is one buyer,the retailer,and many potential sellers,the manufacturing firms.
C)Retailers use it to get quality private-label merchandise at low prices.
D)Reverse auctions are common among commodities and seasonal products.
E)The retailer chooses the lowest bidder regardless of other factors.

Question 26

Retailers often say they are "going to market." What does "market" mean in this context?

A)a shopping center in which the firm plans to open a new store
B)a concentrated area where vendors are permanently located and show new merchandise during certain times of the year
C)a geographic location where the retailer anticipates remarkably good prospects for above average levels of sales
D)the target consumers at whom a line of merchandise will be aimed
E)the intention to price merchandise at whatever the "going rate" happens to be in a particular location

Question 27

A(n)_____________ is a tax placed by a government upon imports.

A)foreign currency fluctuation
B)country of origin effect
C)maquiladoras
D)tariff
E)inventory carrying cost

Question 28

Why did Walmart require its suppliers to sign a code of basic labor and then hired outside auditing firms to inspect supplier factories?

A)Walmart wanted to maintain quality merchandise despite its discount reputation.
B)Walmart was working to build strategic partnerships within Asia.
C)Walmart was working towards collaborative merchandising.
D)Walmart was developing a "Made in America" campaign.
E)Walmart wanted to ensure supplier compliance of core labor standards.

Question 29

One way for a buyer to become familiar with products and styles is to _____.

A)interact with retail exchanges
B)attend trade shows
C)become more familiar with diverted merchandise
D)insist on objective information
E)have and maintain a common goal with vendors

Question 30

Which of the following is NOT descriptive of a trade show?

A)Buyers meet with manufacturer executives to discuss strategies to grow their business.
B)Buyers review performance of the vendor during the previous season.
C)Vendors have celebrities at their booth to promote their merchandise and attract buyers.
D)The public is encouraged to attend and check out the new products that will soon be offered at retail.
E)Buyers see the latest products and styles being offered by vendors.

Question 31

What is the advantage to a national retailer to sell private labels?

A)The retailer spends less on advertising private label brands and therefore saves money.
B)Since the retailer carries the cost of advertising of a private label,the costs are covered by the consumer.
C)Since nationwide stores carry the private brands,it gives little choice to the consumer about assortments.
D)Since it is a national retailer,customers will naturally know the private label.
E)By selling private labels,the national retailer can differentiate their assortments.

Question 32

When given a choice between a national brand of costume jewelry,and a private-label brand,the buyer for a chain of mall specialty stores might choose the private-label brand ________.

A)to increase its nonaffluent customers
B)to limit its store traffic to qualified buyers
C)to prevent its customers from comparison shopping
D)to increase its merchandising flexibility
E)for all of the above reasons

Question 33

_____________ are taxes collected by a government on imported merchandise.

A)Reversed auctions
B)Country of origin costs
C)Fringe expenditures
D)Duties
E)Obligation fees

Question 34

When contemplating sourcing products internationally,which of the following would NOT be an additional costs associated with global sourcing?

A)foreign currency fluctuations
B)tariffs
C)lesser lead times
D)larger inventory carrying costs
E)increased transportation costs

Question 35

Retailers achieve lower gross margins from selling national brands because of _____.

A)poor customer service
B)the distinctive identity national brands have assumed
C)the popularity of private label brands
D)the higher costs incurred by the vendors due to promoting their national brands
E)the cost of quality control

Question 36

If there are so many advantages to selling national brands,why do retailers even carry private brands?

A)Private labels yield higher margins to retailers.
B)Private labels require less investment from a retailer from design to display.
C)Customers have loyalty to national brands.
D)National brands are better quality overall than private brands.
E)National brands offer a retailer more flexibility on how merchandise is displayed and advertised.

Question 37

Linda is a small scale fashion designer who sourced out to a manufacturer in India in order to assemble her fall line.She assumed the patterns for the clothes were simple and obvious,so she believed it unnecessary to personally visit the factory and supervise the workers sewing her clothes.Months later,the shipment arrived in New York and much to her surprise;the seams on all of the blouses were sewn incorrectly.This mishap is an issue of __________.

A)quality control
B)tariff ramifications
C)poor strategy
D)global market satiation
E)global trends

Question 38

What is an advantage to a national retailer for selling private labels?

A)There is less steps and supply chain resources needed to develop private label product.
B)The retailer saves costs as it does not need to market private label products.
C)There is less risk involved with selling private label brands.
D)Private label brands have more clout than national brands.
E)Private label brands can fill assortment voids that are not being met by national brands.

Question 39

Which of the following is a drawback of selling private label merchandise?

A)National brands are far superior to private labels.
B)National brands are produced with better quality.
C)Significant investment is needed to develop,manage and market private labels.
D)Gross margins are lower with private labels than with national brands.
E)Private label merchandise is only possible for department store retailers.

Question 40

Which of the following is a drawback for a retailer when offering national brands?

A)Retailers view national brands as a threat to private labels.
B)Retailers have to discount some national brands in order to attract customers to their stores because customers compare prices for these brands across stores.
C)Significant investment is needed to develop relationships with national brands' vendors.
D)Retailer has to work to market national brands to make them more well known and desired by customers.

Question 41

By sharing common goals,buyers and vendors _______.

A)can avoid sharing each firm's most strategic information
B)can pool their strengths and abilities to exploit potential opportunities
C)can conclude that the long-term results of the relationship are insignificant
D)do not have to coordinate systems for the partnership to succeed
E)commonly miscalculate the cost of merchandise

Question 42

Which of the following statements would be the best reason for a retailer to source products within North America?

A)Retailers do not have to concern themselves with human rights and child labor violations.
B)Retailers do not have to concern themselves with building strategic partnerships.
C)Lead times are shorter.
D)Quality control is no longer an issue for retailers because the labor is better educated.
E)Domestic sources of merchandise are superior to what is found globally.

Question 43

A DKNY vendor has offered to a Dillard's buyer an attractive discount on merchandise that had been returned to DKNY by a different retailer.The Dillard's buyer realizes the high gross margin opportunity,but refuses the offer nevertheless.Why?

A)The buyer wants to preserve Dillard's image as a fashion leader by not selling returned merchandise that could be out of season.
B)By accepting additional merchandise,Dillard's would be paying the additional costs of carrying the merchandise.
C)Dillard's would be accepting unknown merchandise and could risk the purchase as becoming more problems than it is worth.
D)Accepting the excess merchandise could alter the terms of the purchase as well as delivery dates.
E)Transportation costs would increase.

Question 44

When a swimwear buyer negotiates for delivery and exclusivity with a vendor,what would a buyer typically want?

A)A buyer would want the swimwear to arrive late in the season to avoid markdowns.
B)A buyer would ask to have merchandise at competing stores so the only competition factor is price.
C)A buyer would want unique swimwear to arrive early in the season to get the most sales at the original price.
D)A buyer would ask for last season's swimwear as well as the latest swimwear to be able to offer a price differentiation.
E)A buyer would ask for parallel merchandise to be able to offer more variety in assortments.

Question 45

Which of the following prohibits vendors offering different retailers different prices and purchase order terms for the same merchandise,quantity and circumstances?

A)tying contracts
B)Robinson-Patman Act
C)resale price maintenance
D)buybacks
E)copyright laws

Question 46

At FN Platform,vendors display their fashion footwear in designated areas at the Las Vegas convention center and have sales representatives available to talk with buyers as they walk through the exhibit area.This is an example of _______.

A)a retail exchange
B)a trade show
C)diverted merchandise
D)a market
E)a reverse exhibition

Question 47

Yves,an English speaking Frenchman,meets with buyers from the United States when they visit Paris.Once in Paris,the buyers rely on Yves to make appointments with French vendors to save time and penetrate the market.Yves works to help interpret and negotiate during the buyer-vendor meetings.Yves must work for a/an __________.

A)global trade market
B)resident buying office
C)reverse buying office
D)cohort exchange office
E)retail group

Question 48

As a vendor,Melissa works well with a buyer she's known for years at Toys 'R' Us.This past year,Melissa's line of toys experienced a few products that sold poorly,and it is now time to show the Toys 'R' Us buyer the next holiday season's product line.Melissa knows the Toys 'R' Us buyer will be a hard negotiator.What should Melissa be prepared to do?

A)provide markdown money
B)suggest pulling out of Toys 'R' Us for a season to strategize and reinvent
C)suggest selling the toys for another season giving consumers time to acclimate to the products
D)advise that Toys 'R' Us can sell the products at lower prices,but maintain the original prices at other retailers-particularly Walmart
E)provide the Toys 'R' Us buyer with a 3-day weekend in the Bahamas

Question 49

When Whitney took over her father's sporting goods store,she evaluated some of her father's vendor relationships.She found that Rodney's Exercise Wear wasn't particularly profitable for the store.Although committed,his products were expensive and he seemed inflexible.Whitney tried to work out a more amicable relationship with him by discussing her sales goals and new ideas for the coming year,but Rodney seemed uninterested.Which of the following is most likely lacking from the development of this relationship?

A)long-term gains
B)poor leadership
C)fulfilled obligations
D)open communication
E)credible commitments

Question 50

The Macy's buyer is considering increasing selling space at their stores for one of many different vendors in her category.Which of the following would have the LEAST impact on the buyer's decision as to which vendor to grant the additional space to?

A)The amount of slotting allowances the vendor pays.
B)The past gross margin performance of the vendor.
C)The arrangements for exclusive products.
D)The amount of gifts and entertainment the vendors offer.
E)The forecasted demand for the product.

Question 51

By producing her revolutionary scalp coolant shampoo in Canada,Rene will experience which of the following?

A)shorter lead times
B)commercial bribery
C)child labor infractions
D)noncompliance with basic labor standards
E)delayed merchandise production

Question 52

Isabel worked as a senior buyer for jewelry for a department store chain.On a recent visit to a trade show,she noticed a new vendor selling unique earrings,necklaces,and bracelets made of glass.She had seen such pieces in trade magazines before,but initially ignored them because of the exorbitant price.She thought her affluent customers would appreciate the look,so she decided to talk with the sales rep to learn more about the possibility of trying the jewelry out in only a few of her top stores.Which phase BEST describes Isabel's level of commitment?

A)expansion
B)consideration
C)commitment
D)exploration
E)awareness

Question 53

Which of the following issues would NOT be appropriate for buyers to discuss with a vendor that has been performing well above their planned gross margin?

A)markdown money provisions
B)margin enhancing opportunities
C)terms of purchase
D)advertising allowances
E)exclusivity of products

Question 54

Violations of human rights and child labor are avoided by ______.

A)only sourcing products in third-world countries
B)only sourcing products from Asia
C)self-policing
D)having a collaborative system
E)having a willingness to pay more for the products

Question 55

_____ are charges imposed by a retailer to stock a new item.

A)Margin guarantees
B)Slotting allowances
C)Additional markup dollars
D)Advertising allowances
E)Markdown money

Question 56

Louise runs a successful shop in Chicago featuring one-of-a-kind dolls from Western Europe.Louise speaks German and a little Dutch,but no Italian,French or Spanish.How can she best buy dolls from all European nations,and maintain her unique assortments?

A)Louise can visit wholesale market centers throughout the year.
B)Louise can attend trade shows in the United States and meet vendors there.
C)Louise can establish a time for vendors to visit her in her own office.
D)Louise can buy from local artists of European descent.
E)Louise can utilize a resident buying office when she visits Europe to buy.

Question 57

When negotiating with a vendor,the best outcome for a retailer would be _______.

A)to dismiss the negotiation if there's no agreement and ultimately cancel the vendor relationship
B)to leave the negotiations with an advantage over the vendor
C)to have mutual gain
D)to give the vendor the advantage in the negotiation only to use it in your favor for the following season
E)to agree to disagree on performance thresholds

Question 58

Randolph is the divisional merchandise manager for Home for Walmart.At a recent trade show he noticed small kitchen appliances being shown in retro colors like pistachio,eggplant and cotton candy.Knowing the kitchen designs were moving in this direction,he decided to discuss it with his senior buyers to see if these retro colors would suit the Walmart market.What phase BEST describes Randolph's level of commitment?

A)awareness
B)consideration
C)exploration
D)expansion
E)commitment

Question 59

What is the best reason for retailers to develop and maintain relationships with multiple and sometimes competing suppliers?

A)A more efficient supply chain occurs when multiple vendors are involved.
B)A function of retailers is to provide assortments so they must deal with a variety of suppliers.
C)By working with multiple suppliers,retailers tend to make better negotiators.
D)A variety of vendors assures more profit.
E)It would be unethical for a buyer to solely work with one supplier.

Question 60

Which of the following is a negotiation issue that is often used in fashion merchandise categories?

A)Slotting allowances
B)Additional markup dollars
C)Advertising allowances
D)Exclusivity arrangement
E)Co-op (cooperative)advertising

Question 61

A socially responsible movement that ensures that producers receive adequate prices for their products is ___________.

A)green sheen
B)whitewashing
C)black marketing
D)fair trade
E)unlicensed branding

Question 62

Minute Maid juices along with Mellow Yellow,Sprite,Fanta and other beverages are all produced by Coca-Cola.Coca-cola is the _____________.

A)premium brand
B)copycat brand
C)umbrella brand
D)exclusive brand
E)subbrand

Question 63

Janine buys swimwear for chain store and while at a recent trade show,she took the opportunity to meet with a few vendors.During one meeting a vendor that she normally purchases from each season,proposed a weekend in the Cayman Islands to view the swimwear that European tourists were wearing.Janine knows that it would be beneficial for trend direction to see what European tourists are wearing and then translate what she is seeing into her assortment for her target customer.Before she could further discuss this offer with the vendor,what should she do?

A)be certain that all her work is completed before she leaves for an extended weekend
B)inform her divisional merchandise manager of the proposal
C)look at her budget to see how much product she would be able to purchase from this vendor this season
D)see what other vendors might be offering
E)check to see if there might be a better place than the Cayman Islands to scope out swimwear trends

Question 64

When a grocery retailer develops their own high quality private label organic food product,this would be a(n)_____________.

A)premium brand
B)copycat brand
C)umbrella brand
D)exploratory brand
E)superbrand

Question 65

Prior to meeting with a vendor,a buyer will analyze their business and prepare to discuss certain areas with them.What does the buyer and vendor discuss during their meetings and what types of things might be negotiated?

Question 66

When identifying national brands,the family brand is the same as a(n)_________.

A)premium brand
B)copycat brand
C)umbrella brand
D)exclusive brand
E)subbrand

Question 67

What is the outcome when a retailer sells counterfeit merchandise?

A)The retailer can be heavily fined through the rulings of the Robinson-Patman Act.
B)The retailer will lose money once the customers discover the truth.
C)The retailer can destroy the relationship with the true brand.
D)The retailer will lose customers loyal to the brand.

Question 68

What are some of the benefits of offering private labels?

Question 69

If there are so many advantages to carrying private brands,why do retailers even bother to sell national brands?

Question 70

A retailer that develops their own private label product that competes with national brands on quality rather than price is a(n)_____________.

A)premium brand
B)copycat brand
C)umbrella brand
D)exclusive brand
E)subbrand

Question 71

Why do manufacturer brands often generate lower gross margins for retailers than do private label brands?

Question 72

A vendor's recent shipment at the retailer's distribution center was on time,but the boxes were mislabeled along with other infractions against the retailer's mandated shipment policies.What should the retailer do?

A)pay the vendor invoice immediately to assure deliveries are still on time in the future
B)take the vendor to court
C)accept vendors' gifts to repay the inconvenience infractions
D)issue a chargeback
E)send the shipment back

Question 73

What exists when a vendor and a retailer enter into an agreement that requires the retailer to take a product it doesn't necessarily desire to ensure that it can buy a product that it does desire?

A)exclusive dealing agreement
B)functional discount
C)competition
D)better selection
E)tying contract

Question 74

Steve buys men's dress shirts for JC Penney and at a recent trade show,he took the opportunity to see a few new vendors.During one meeting a vendor proposed a ticket to a coveted college football game.Steve graciously declined because he was concerned he would be engaging in ______.

A)commercial bribery
B)free-riding
C)slotting allowances
D)buybacks
E)exclusives

Question 75

________________ are private label products produced by the retailer that imitate the national brand in both appearance and packaging,but are often offered at a lower price.

A)Premium brands
B)Generic brands
C)Copycat brands
D)Exclusive brands
E)Licensed brands

Question 76

_________,also known as stocklifts or lift-outs,are activities engaged in by vendors with retailers to get their products into retail stores.

A)Charge backs
B)Buybacks
C)Commercial bribery
D)Tying contacts
E)Resale price maintenances

Question 77

What are some of the drawbacks of using a private label brands?

Question 78

Apple is a well-known national brand of computer and electronic products and accessories.Their iPad would be considered a _________.

A)premiere brand
B)copycat brand
C)umbrella brand
D)exclusive brand
E)subbrand

Question 79

Companies are practicing ___________________ market products to be environmentally friendly for the purpose of gaining public approval and higher sales rather than to actually improve the environment.

A)green sheen
B)whitewashing
C)black marketing
D)fair trade
E)unlicensed branding

Question 80

Describe the four phases in the development of strategic partnering relationships that are characterized by increasing levels of involvement.