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2008 DECA Ontario ProvincialsTest 956 AUTOMOTIVE SERVICES MARKETING 1

ASM

1. What type of corporation may be owned by just a few people and does not offer its shares for sale to the general public?

A. Open B. General C. Close D. Limited

2. Why is product liability an important legal issue that affects the vehicle and petroleum marketing industry?A. The production process is expensive. C. Insurance is difficult to obtain. B. Customer safety is involved. D. The court system is complex.

3. Which of the following is a transportation activity that is part of distribution:A. Storing and handling automotive goods C. Counting the automotive goods on hand B. Receiving shipments from the carrier D. Moving automotive goods from sellers to buyers

4. As an automotive product moves from producer to consumer, it takes a channel of distribution. This is the __________ the product takes.

A. route B. time C. waterway D. mode of transportation

5. Preventing other distributors from obtaining and selling the same automotive accessory to customers is an example of a(n) __________ that is illegal.

A. tying agreement C. strategic alliance B. exclusive dealing arrangement D. marketing plan

6. To make sure products are available when customers want them, a tire and battery store should coordinate promotion with

A. segmentation. B. transportation. C. distribution. D. communication.

7. Which of the following often is able to avoid conflict within a channel of distribution:A. Modern technology C. Customer service B. Strong leadership D. Governmental control

8. Which of the following is not a barrier to effective verbal communication:A. Thinking of what to say next C. Interrupting the speakerB. Asking for clarification D. Judging the speaker's appearance

9. A good example of a casually operated group is aA. football team running laps around the field. C. few players tossing a football during practice. B. few friends talking about football. D. football team selecting a strategy or play.

10. What is the main form of written communication between automotive services marketing companies?A. Memorandums B. Business letters C. Meetings D. Telephone calls

11. Auto-parts stores try to establish effective policies for allowing customers to buy now and pay later because much of the stores' revenue is based on

A. discount coupons. C. delivery fees.B. reduced prices. D. credit sales.

12. What type of customer expects immediate service regardless of the circumstances?A. Slow/Methodical B. Suspicious C. Dishonest D. Impatient

13. When the auto-parts store checker sorts each package in a shipment by style, size, and color, and makes a physical count of the contents to compare with the invoice, this is called a(n) __________ check.

A. quantity B. quality C. invoice D. combination

Copyright © 2008 by Marketing Education Resource Center®, Columbus, Ohio


14. Ground storage can be used for products thatA. require controlled humidity. C. will not be damaged by the weather.B. should be arranged in bins. D. need to be kept clean.

15. A distribution center is an example of a(n) __________ warehouse.A. in-transit B. public C. bonded D. private

16. Apogee Automotive Products would like to monitor its inventory on a rotating basis so that employees only count portions of the stock at a time rather than all of it at once. What type of unit inventory control system should Apogee use?

A. Visual control B. Physical count C. Circular count D. Tickler control

17. Small muffler shops using manual inventory control systems often maintain inventory information onA. asset report forms. C. basic stock lists.B. stock record cards. D. sales call reports.

18. More money payments are received for an economic good when its value isA. high. B. low. C. limited. D. estimated.

19. Determine whether the following statement is true or false: Trade industries all have the same form of ownership.A. False, they may be independent or belong to a chain.B. True, they are all independently owned.C. False, they may be corporations or partnerships.D. True, they all belong to a chain.

20. Which of the following is a negative effect on businesses of government regulation:A. Patents, trademarks, and copyright protection are provided.B. Unfair trade practices are prohibited.C. The use of resources is regulated.D. Additional expense and inefficiency are experienced.

21. Which of the following is not a customer benefit of competition:A. Limited selection C. Better quality productsB. Lower prices D. More and better customer services

22. 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

23. Whenever the United States establishes trade relations with a developing nation, it means that the citizens of the developing country will be able to sell their goods and purchase more goods. For the developing country, this will promote

A. an economic decline. C. the underground economy.B. a higher standard of living. D. the wise use of resources.

24. The international aspect of petroleum marketing often has a negative effect on retailing because only a few countries have

A. consumers who are financially able to buy. C. control of most of the natural resources.B. a need for petroleum products. D. the outlets required to market oil products.

25. In an employment evaluation, new oil-change shop employees have to identify their self-concept. What are some examples they could use for identifying self-concept?

A. Physical traits B. Affirmations C. Visualizations D. Abilities


26. Which of the following is an example of a situation that an ethical tire and battery store employee might report to management:

A. A coworker calling a friend during a lunch break B. A coworker "borrowing" money from the petty cash fund C. A coworker explaining company discounts to a customer D. A coworker paying the business to ship a personal package

27. Although it should not stop you, behaving with enthusiasm often involves some degree ofA. embarrassment. B. luck. C. risk. D. physical danger.

28. The primary reason many people tend to resist change is because ofA. the adjustment required. C. fear or insecurity. B. the risk involved. D. a lack of understanding.

29. Being able to put yourself in another person's place means that you haveA. perspective. B. respect. C. empathy. D. understanding.

30. The auto-parts store customer has been leaning forward, smiling, and nodding throughout the product demonstration. The idea that the customer is most likely trying to express with body language is that s/he

A. wants to be helpful to the salesperson. C. is hoping that the salesperson will stop.B. is interested in the salesperson's product. D. has something that s/he wants to say.

31. In every work environment, employees need to rely on one another for various reasons. This means that these workers are

A. independent. B. interdependent. C. interrelated. D. dependable.

32. Franklin received his monthly statement from Friendship Automotive Store. Franklin realized that the company had made a mistake and charged him twice for a set of car speakers. He notified the company of this error and requested an investigation. A representative from Friendship informed Franklin the company would look into this matter and provide a written explanation or correct the error within 90 days. The federal credit legislation that Friendship is complying with is known as the

A. Fair Credit Reporting Act. C. Truth-In-Lending Act.B. Fair Credit Billing Act. D. Equal Credit Opportunity Act.

33. Which of the following is the primary capability of most word-processing software programs:A. To maintain customer lists C. To create text documents B. To generate spreadsheets D. To catalog personnel records

34. Which of the following is a characteristic of a profit-and-loss statement:A. Shows the owner's financial position C. Summarizes expenses and revenue from salesB. Is the same as a balance sheet D. Lists assets and liabilities

35. What is one way that an automotive accessory manufacturer might use marketing information?A. To identify new vendors C. To calculate statisticsB. To interpret findings D. To develop new products

36. Using marketing research to find out how many consumers are in an automotive business's market, where they live, and what kinds of products they buy would help the business to

A. keep the business up-to-date. C. describe the target market. B. forecast economic trends. D. maintain the business's image.

37. Which of the following is information contained in sales records that an auto-parts store usually monitors in order to make marketing decisions:

A. Personnel B. Advertising C. Inventory D. Investment


38. Which of the following processes do automobile repair employees follow after collecting marketing research in order to make it useful:

A. Analyzing C. StoringB. Sampling D. Reporting

39. Pricing is an important marketing function because the price of an automotive good or service also affects itsA. utility. C. source.B. demand. D. trademark.

40. Which of the following is a consideration in the price element of marketing:A. When will research be conducted? C. Will the business use publicity?B. Where will the products be stored? D. Should the business offer discounts?

41. A target market can be described as theA. direction the market is headed.B. group of customers the automotive business seeks to attract. C. way an automotive business draws its customers. D. sample of the market.

42. Which of the following is an effective objective that an automotive accessory business might develop before proceeding with the marketing planning process to achieve the objective:

A. Develop advertising to appeal to a broad audience B. Hire more salespeople C. Increase sales this year by 10% over last year D. Reduce prices on seasonal products

43. Which component of the marketing plan summarizes the environmental conditions that can affect an auto-parts store's marketing activities:

A. Conditional assessment C. Situational analysis B. Diagnostic summary D. Environmental synopsis

44. Which of the following is a reason that not all auto-repair businesses forecast sales:A. Forecasting methods are hard to understand.B. Sales forecasts cost too much money. C. Too much information is available. D. Small businesses can't use sales forecasts.

45. One reason an existing auto-parts business might develop a company web site is toA. increase its product mix. C. lower tax rates.B. reduce marketing expenses. D. create a new revenue source.

46. Who is legally responsible for repaying a bank loan if the loan borrower fails to make payments as indicated in the loan contract?

A. Credit union C. Treasury Department B. Co-signer D. Debt collectors

47. Which of the following types of computer software programs do automotive services businesses use to store valuable information about customers:

A. Database C. Spreadsheet B. Interactive D. Publishing

48. One of the benefits to auto-parts stores of regularly evaluating the performance of vendors is the opportunity to A. identify and correct problems. C. obtain a lot of information. B. purchase discounted goods. D. analyze the volume of work.


49. One reason it is important for many vehicle and petroleum products to be disposed of properly after being used is because they are

A. large equipment. C. expensive items.B. liquid materials. D. hazardous waste.

50. Keeping aisles clear and file cabinets closed would be part of which of the following accident-prevention techniques:A. Practicing vehicle safety C. Lifting objects properlyB. Following proper health standards D. Maintaining a clean work area

51. Commissions paid to automobile salespeople increase as the amount of their sales increase. This is an example of __________ costs.

A. fixed C. operatingB. variable D. semivariable

52. What should project managers do before asking for contributions?A. Hold a fund-raiser. C. Arrange for credit. B. Open an account. D. Prepare a budget.

53. On the job, orderly and systematic behavior results in increasedA. efficiency. C. clutter.B. mistakes. D. stress.

54. To obtain a job promotion is an example of a __________ goal.A. career C. physicalB. social D. personal

55. An effective technique in conducting a job search is writing to personnel directors andA. addressing them by name. C. requesting salary information.B. inviting them to lunch. D. asking them to respond immediately.

56. After a job interview, you realize that you forgot to mention something important during the interview. What action should you take?

A. Fax an urgent message to the interviewer.B. Phone the interviewer to explain it.C. Mention it in a follow-up letter.D. Go back to the business to tell the interviewer.

57. Which of the following is an example of an automotive services employee making good use of free time during the business day, while on a flight to a sales meeting:

A. Reading business reports C. Watching an in-flight movieB. Taking a short nap D. Listening to recorded music

58. Which of the following is one of the main responsibilities of the shop supervisor at an automobile dealership:A. Reporting to sales managers C. Overseeing the work of the techniciansB. Providing service to customers D. Working with factory representatives

59. Automotive accessory salespeople can update their information about new products, styles, and merchandising trends by

A. reading trade journals. C. observing customers.B. visiting other cities. D. consulting the competition.

60. The marketing function that determines how much an auto-parts business will charge for its products isA. production. C. profit. B. pricing. D. persuasion.


61. Price fixing is often considered an ethical issue because itA. leads to unusual fluctuations in consumer demand.B. eliminates competition in a free enterprise system.C. forces consumers to purchase nondurable goods in bulk.D. encourages the practice of price skimming in the marketplace.

62. Which of the following is a type of regulation that discourages predatory pricing practices and encourages fair trade:A. Anti-skimming C. Anti-captive B. Anti-puffery D. Anti-dumping

63. An automobile manufacturer has set a high price on its new sports car in order to recover its development expenses. What stage of the product life cycle has affected the car's price?

A. Maturity C. Introduction B. Growth D. Decline

64. What product/service planning function often is expensive, but also can significantly increase sales?A. Grading C. PackagingB. Handling D. Labeling

65. Which of the following is a technologically advanced method that allows businesses to produce automotive products that are specialized for a very few customers:

A. Mass customization C. Computerized roboticsB. Automatic production D. Intermittent conversion

66. A warranty that covers only specific automobile parts or certain repairs is a(n) __________ warranty.A. implied C. fullB. limited D. product

67. Which of the following is not required by the Federal Trade Commission in a written warranty:A. How long the warranty is in effectB. How to contact government agenciesC. What kinds of service or repairs are includedD. Where to take or send the merchandise for service

68. An automotive accessory store might use product bundling strategies when it wants to A. substitute brand products with generic items. B. lower its advertising expenses and publicity efforts. C. build ongoing relationships with its customers. D. deplete slow-moving items from its inventory.

69. What group is the largest buyer of aftermarket auto-parts and accessories?A. Small auto-repair shops C. Used-parts storesB. Auto-parts and accessory distributors D. New car dealers with repair shops

70. A midpriced automobile company provides customers with free transportation while their cars are being repaired. What attribute is the company using to gain the competitive advantage?

A. Safety C. LoyaltyB. Service D. Performance

71. Brands appeal to consumers on both __________ levels.A. good and evil C. rational and emotional B. physical and spiritual D. black-and-white

72. If sales were $276,000 last year, and a 12% increase is expected for this year, what are planned sales for this year's merchandising plan?

A. $309,120 C. $30,912 B. $33,120 D. $331,200


73. Which of the following would not be used in calculating stock turnover rate:A. Average stock C. Total stockB. Gross profit D. Net sales

74. One of the purposes of calculating open-to-buy several times during the month is to avoidA. budgeting. C. overbuying.B. forecasting. D. purchasing.

75. Which of the following is a good reason for an auto-parts store to choose a certain vendor:A. To follow tradition C. To get the best priceB. To avoid competition D. To please customers

76. The tool that automotive services businesses use to communicate with customers in order to achieve a desired outcome is

A. persuasion. B. promotion. C. marketing. D. relevance.

77. The basic objective of product promotion is toA. enhance company morale and recruit employees.B. inform the public about the company's future.C. persuade consumers to buy a good or service.D. demonstrate the firm's social responsibility.

78. The promotional mix focuses on informing customers about the existence of an automotive product when the product is in the __________ stage of the product life cycle.

A. introduction B. maturity C. declining D. growth

79. When the manager of a large tire and battery company takes potential customers out for lavish dinners and buys them expensive gifts, it might appear as if the manager is engaging in the unethical practice of

A. fraud. B. puffery. C. slander. D. bribery.

80. The EFG Muffler Company verifies that its customers would like to receive promotional information through their computers. This is an example of

A. online cookies. B. unsolicited junkmail. C. opt-in e-mail. D. instant messaging.

81. Which of the following is a good reason for an oil-change shop to use out-of-home advertising:A. Reading the message takes about 15 seconds. C. Most consumers admire billboards.B. Many more firms are using it. D. It has a high repeat exposure rate.

82. When workers dismantle a display, the props should beA. put in different departments. C. left in the display. B. taken to a storage area. D. thrown away because they are not reused.

83. The most important consideration in installing display lighting is to make sure that the lighting willA. be seen by customers. C. emphasize the signs. B. illuminate the merchandise. D. be easy to remove.

84. Which of the following is a true statement about an automotive services business's promotional plan:A. Most promotional plans include more than one type of promotion.B. The promotional budget is not part of the promotional plan.C. The plan's promotional objectives are based on external factors.D. The product's life-cycle stage does not affect the promotional plan.

85. Which of the following is one of the reasons why auto-parts stores coordinate promotional activities:A. To collect demographic information C. To develop long-term forecasts B. To create interest among customers D. To plan inventory control programs


86. Selling is often referred to as personal selling because itA. can take place in the customer's home. C. involves interaction with customers.B. follows a standardized format. D. provides specific product information.

87. Which of the following is an example of a tire and battery store salesperson providing poor customer service:A. Ignoring a customer's request for information B. Returning a customer's call in a timely manner C. Answering a customer's questions honestly D. Following up with a customer after the purchase

88. The body of customers upon which an automobile dealership can rely for significant repeat business is called itsA. competitors. B. employees. C. suppliers. D. clientele.

89. The automobile manufacturer designed new models with costly emission control devices to reduce air pollution. This caused the company to change its selling policies by __________ the cars.

A. lowering the price of C. increasing the price of B. offering discounts on D. advertising factory rebates on

90. Which of the following is a quick and cost-efficient way to send a written sales proposal to a prospective automotive services customer who is located in another geographical region:

A. Videoconference C. Electronic mail B. Telephone D. Overnight courier

91. A business that develops a promotional brochure stating that its automotive product performs well under all circumstances might be violating certain

A. warranty specifications. C. advertising guidelines. B. selling regulations. D. publishing rules.

92. A large amount of information about an automotive accessory product, such as color, texture, construction features, and design, may be obtained by examining the

A. hangtag. B. product itself. C. label. D. package or wrapper.

93. Which of the following is a service that a factory representative might provide an auto-parts store in order to help the store sell products:

A. Conducting demonstrations C. Organizing shelf space B. Handling complaints D. Monitoring inventory

94. Which of the following is a main component of an automobile's electrical system:A. Watt B. Fuse C. Rotor D. Strut

95. A crankshaft, connecting rods, and pistons are main parts of an automobile'sA. ignition. B. compressor. C. battery. D. engine.

96. In what type of store do salespeople usually approach customers only after the customers ask questions?A. Specialty boutique C. Mail-order B. Owner-operated D. Self-service

97. The auto-parts store salesperson can tell when it is time to try to close the sale by theA. customers' buying signals. C. customers' loss of interest.B. amount of time that has passed. D. number of objections handled.

98. What is the total cost to the customer of an item priced at $17.99 if both a 4% state sales tax and 1% county sales tax are charged?

A. $18.89 B. $18.71 C. $18.17 D. $18.95


99. Which of the following questions or statements would help to build rapport between an auto-parts store customer-service representative and a customer when a telephone order is being processed:

A. "Give me your phone number." C. "What's the name on the account?"B. "Would you spell your name for me?" D. "What's your address?"

100. What level of management is responsible for establishing company objectives, selecting strategies for reaching goals, and providing leadership for the automotive services company?

A. Middle management C. Executive managementB. First-level management D. Supervisory management

2008 DECA Ontario ProvincialsTest 956 AUTOMOTIVE SERVICES MARKETING

101. C

Close. A close corporation, or closely held or private corporation, may be owned by just a few people and does not offer its shares for sale to the general public. It usually is not required to make its financial activities public. For tax reasons, it must prepare reports for the states in which it operates. An open corporation usually sells millions of shares of stock to many stockholders. Limited and general are types of partnerships.SOURCE: BL:003SOURCE: BA LAP 7—Own It Your Way

2. BCustomer safety is involved. Product liability is the producer's responsibility for any injury that the business's products may cause. This is an important legal issue that affects the vehicle and petroleum marketing industry because many of the businesses produce transportation-related products that may have an effect on a customer's safety. For example, automobiles and automotive parts that have a design defect may cause accidents that result in injury or death. In many cases, the court system has held these businesses responsible for injuries caused by defective products, which have resulted in large monetary fines and settlements. Product liability is not an important legal issue because the production process is expensive, insurance is difficult to obtain, or the court system is complex. SOURCE: BL:061SOURCE: Jennings, M.M. (2000). Business: Its legal, ethical and global environment (5th ed.)

[pp. 328-333]. Cincinnati: West Legal Studies in Business, South-Western College.

3. DMoving automotive goods from sellers to buyers. The act of moving anything from one place to another or the method by which it is moved is referred to as transportation. Transportation activities are used by manufacturers, wholesalers, and retailers in order to make goods available to consumers. Receiving shipments from the carrier and storing and handling goods are parts of the receiving process. Counting the goods on hand is taking a physical inventory.SOURCE: CM:001SOURCE: DS LAP 1—Distribution

4. ARoute. Some channels are direct—the automotive product goes directly from the producer to the consumer. Other channels are indirect—the automotive product goes from the producer to intermediaries and then to consumers. Modes of transportation are the various types of physical transportation such as ship, train, and truck. A waterway is a river or other body of water that may be used in transporting goods. The time required for the product to pass through the channel will be determined by the length of the channel and the type of transportation used.SOURCE: CM:003SOURCE: MB LAP 3—Channels of Distribution

5. ATying agreement. A tying contract, or agreement, is an illegal agreement requiring a customer to buy other automotive accessories in order to obtain desired goods and services. Tying agreements are considered illegal if they substantially limit competition by preventing other distributors from obtaining and selling the same product to customers. An exclusive dealing arrangement between a supplier and an intermediary states that the intermediary will distribute only that supplier's products and will not handle a competitor's products. A strategic alliance is a long-term relationship between two or more businesses. A marketing plan is a set of procedures or strategies for attracting the target customer to a business.SOURCE: CM:005SOURCE: Armstrong, G., & Kotler, P. (2000). Marketing: An introduction (5th ed.) [p. 377]. Upper

Saddle River, NJ: Prentice Hall.


11 6. C

Distribution. Promotion helps to create demand for products while distribution makes those products available. Tire and battery stores coordinate distribution with promotional activities to make sure that sufficient quantities of advertised products are available when customers want to buy them. If a store plans to promote a certain tire, the store must make sure than an adequate supply will be on hand to meet consumer demand. Stores may lose customers if they promote certain items that are not available because they failed to make the necessary distribution arrangements. Transportation is the act of moving items from one place to another and is only one aspect of distribution. Segmentation involves dividing something, such as a total market, into smaller, more specific groups. 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.SOURCE: CM:007SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 367).

New York: Glencoe/McGraw-Hill.

7. BStrong leadership. Strong leaders have the authority and power to influence others and direct the actions of others. A channel of distribution that has strong leadership is often able to avoid conflict within the channel because the leader has the authority to set goals for the entire channel and demand cooperation, which reduces the possibility of conflict. The leader's authority makes it possible for the leader to assign specific responsibilities to each channel member and persuade members to accomplish their individual tasks. When each member is cooperating and working for the good of the channel, there is less chance of conflict. Modern technology, customer service, and governmental control are not able to avoid conflict within a channel of distribution.SOURCE: CM:008SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 444-445].

Mason, OH: Thomson/South-Western.

8. BAsking for clarification. Effective listeners give full attention to what is being said and ask questions to make sure that they understand the message. Listeners who interrupt are focusing on themselves rather than the speaker. Judging the speaker's appearance distracts the listener from what is being said. Thinking of what to say next instead of listening to what is being said is a common barrier to effective communication.SOURCE: CO:147SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 180-

182). New York: Glencoe/McGraw-Hill.

9. BFew friends talking about football. If the group's purpose is to give and find out opinions, the way the group operates is casual. No real “rules” exist beyond the normal standards of common courtesy. When the football players toss the football or run laps during practice, they are likely to operate under the direction of the coach. In a similar way, selecting a strategy or play may require the football players to conduct a more formal group discussion.SOURCE: CO:053SOURCE: QS LAP 29—Put In Your Two Cents


1210. B

Business letters. Business letters are the most common form of written communication used by automotive services marketing businesses to exchange information with other organizations or with customers. Memorandums are informal letters or notes between a company's employees. They are the main form of written communication within a business. Telephone calls and meetings are not forms of written communication.SOURCE: CO:016SOURCE: Lesikar, R.V., Pettit, J.D., Jr., & Flatley, M.E. (1999). Lesikar's basic business

communication (8th ed.) [pp. 76-77]. Boston: Irwin/McGraw-Hill.

11. DCredit sales. Many auto-parts stores offer their customers the choice of purchasing goods and services on credit. Establishing good credit policies is important to stores because much of their revenue is based on credit sales. Reduced prices mean lower prices for customers but less profit for stores. Delivery fees account for only a small portion of a store's revenue. Discount coupons do not add to a store's cash intake.SOURCE: CR:007SOURCE: HR LAP 25—Interpreting Business Policies

12. DImpatient. Impatient customers want assistance immediately and have great difficulty waiting their turn. Dishonest customers are those who intentionally attempt to avoid paying part or all of the price for a good or service. Slow/Methodical customers require a lot of time to make a purchase because of shyness or difficulty in making a choice or buying decision. Suspicious customers question everything and may want facts and proof before being convinced something is true.SOURCE: CR:009SOURCE: EI LAP 1—Making Mad Glad (Handling Difficult Customers)

13. AQuantity. A quantity check involves counting merchandise. Quality checks mean the merchandise is checked for any damage or imperfections. In an invoice check, the auto-parts store compares the invoice with the purchase order. Combination is simply using the direct check method when the supplier's invoice is available and the blind or semiblind check method when the store does not have the supplier's invoice.SOURCE: DS:085SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 510-


14. CWill not be damaged by the weather. Ground storage is out-of-doors and can only be used for products that will not be damaged by rain, snow, heat, or cold. Ground storage is used by marketers of such products as cars, bricks, and coal. Products that need to be kept clean, sorted into bins, or held in a humidity-controlled environment should be stored in appropriate warehouses.SOURCE: DS:013SOURCE: DS LAP 7—Storage Considerations


1315. D

Private. A distribution center is an example of a private warehouse because it is owned by the company that uses it. A public warehouse is owned by an independent business and rents space to others on an as-needed basis. Bonded warehouses store products requiring federal tax. In-transit is a type of storage rather than a warehouse facility.SOURCE: DS:032SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 473-


16. DTickler control. Apogee Automotive Products will count its products on a rotating basis, counting only a portion of the inventory at a time. This is referred to as tickler control. When employees simply look over the stock from time to time to see what is in short supply, they are using visual control. A physical count determines the precise amount of stock on hand at the time of the count by tallying each unit of stock. Circular count is not a type of unit inventory control.SOURCE: DS:022SOURCE: DS LAP 3—Unit Inventory Control Systems

17. BStock record cards. Small muffler shops using manual inventory control systems often keep inventory information on stock record cards. Stock record cards are filled out by hand and updated with every transaction. A typical stock record card contains the description of each type of good, amount in stock, location, reorder level, etc. Shops indicate on the stock record card when goods are received and when they are used or sold in order to maintain a current inventory count. Asset report forms list anything of value that the shop owns. Basic stock lists are lists of minimum amounts of staple goods that should be on hand and reordered. Sales call reports are records of salespeople's meetings with customers.SOURCE: DS:091SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 510).


18. AHigh. Producers and consumers are willing to pay more when an economic resource is highly valued. When there is a large supply of an economic good, the money payments are lower. If an item's value is limited, the item's money payments would be low. The value of an economic good is a definite amount, not an estimate.SOURCE: EC:003SOURCE: EC LAP 14—Economic Resources

19. AFalse, they may be independent or belong to a chain. Trade industries are businesses that buy and sell goods without changing the form of the products. In addition to the independently owned trade industries and those that are part of a chain, there are "voluntary chains" of independent businesses that have joined together to obtain the discount prices available to chain stores.SOURCE: EC:070SOURCE: MB LAP 6—Business and Society


1420. D

Additional expense and inefficiency are experienced. They occur because businesses need large numbers of employees just to handle government requirements. Some businesses become so involved in meeting government requirements that they do not operate efficiently. The other alternatives are positive effects of government regulation.SOURCE: EC:008SOURCE: EC LAP 16—Government and Business

21. ALimited selection. Competition causes businesses to provide a wider selection of goods and services in order to get and to keep a share of the market. The other alternatives are ways that competition can benefit the consumer.SOURCE: EC:012SOURCE: EC LAP 8—Ready, Set, Compete!

22. DFrictional. 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.SOURCE: EC:082SOURCE: O'Sullivan, A., & Sheffrin, S.M. (2003). Economics: Principles in action (p. 331). Upper

Saddle River, NJ: Prentice Hall.

23. BA higher standard of living. Standard of living is the style in which families or individuals live. An increase in the standard of living means an improvement in the material well-being of citizens. Economic decline means that there is rising unemployment, and people cannot purchase what they need and want. Establishing trade relations would not necessarily promote the wise use of resources or an underground economy.SOURCE: EC:016SOURCE: EC LAP 4—Beyond US (International Trade)

24. CControl of most of the natural resources. Petroleum marketing is an international industry; however, most of the natural resources are controlled by only a few countries. As a result, these countries have significant influence on the availability and price of petroleum products. The oil-producing countries have the power to limit production and raise prices, which impacts retailing. To reduce the control of only a few countries, major petroleum corporations spend millions of dollars exploring for oil throughout the world. Most countries have a need for petroleum products, consumers who are financially able to buy, and the outlets required to market oil products.SOURCE: EC:094SOURCE: Johansson, J.K. (2000). Global marketing: Foreign entry, local marketing & global

management (2nd ed.) [pp. 39-41]. Boston: Irwin/McGraw-Hill.


1525. D

Abilities. To describe self-concept, oil-change shop employees should address their roles, personal traits, skills, and abilities. Roles are parts or positions that one plays in life and can be different for each person and can change as a person matures. Personal traits are expressed by a consistent pattern of behavior. Skills and abilities are the capacity to perform a certain task, function, etc. Affirmations are positive statements about something you want to accept or change. Visualizations are imagining yourself in a present or desired strength. Physical traits include age, sex, height, weight, etc.SOURCE: EI:016SOURCE: HR LAP 12—Self-Esteem

26. BA coworker "borrowing" money from the petty cash fund. Some situations at work are unethical even though they are not serious. An example is a coworker "borrowing" money from the petty cash fund. If the coworker does not replace the money, the coworker is stealing from the business. This is a situation that an ethical employee should report to management. It is not unethical for coworkers to call friends during the lunch break, explain company discounts to customers, or pay the business to ship a personal package.SOURCE: EI:004SOURCE: EI LAP 4—Work Right (Ethical Work Habits)

27. CRisk. Behaving with enthusiasm requires that you openly express and commit yourself—it involves a little risk. Risk may or may not take the form of embarrassment or physical danger. Luck is irrelevant.SOURCE: EI:020SOURCE: HR LAP 20—Interest and Enthusiasm

28. CFear or insecurity. Change is threatening to most people, and they tend to resist it because it threatens their security, and they are afraid of the outcome. Lack of understanding, risk, and the necessary adjustment are factors that contribute to their fear.SOURCE: EI:026SOURCE: HR LAP 8—Adjusting to Change

29. CEmpathy. Empathy is the ability to put yourself in another person's place or to "walk in another person's shoes." Respect is honor and esteem. Perspective is the way in which people view life. Understanding is the ability to comprehend or to think and learn.SOURCE: EI:030SOURCE: HR LAP 17—Empathy

30. BIs interested in the salesperson's product. The auto-parts store customer is using body language to express interest in the product and what the salesperson is saying about the product. Leaning toward the speaker, smiling, and nodding are all forms of positive nonverbal communication. While this acceptance may be helpful to the salesperson, that is not its intent. The customer would indicate that s/he wished to speak or wished the speaker to stop by using other forms of verbal or nonverbal communication.SOURCE: EI:007SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 185,

284-286). New York: Glencoe/McGraw-Hill.


1631. B

Interdependent. People who depend upon one another are interdependent, rather than independent. They may or may not be dependable, or reliable. They would not be interrelated or related to each other.SOURCE: EI:037SOURCE: EI LAP 5—Can You Relate?

32. BFair Credit Billing Act. The federal legislation that Friendship Automotive Store is complying with is known as the Fair Credit Billing Act. This is a federal law that specifies the time period in which a business must handle a credit customer's complaint and inquiry about his/her bill. The Fair Credit Reporting Act is a federal law that gives consumers the right to inspect the files of their credit history at any credit agency and to have mistakes corrected. The Truth-In-Lending Act is a federal law which protects consumers who use credit and makes it easier for them to compare the terms of different credit systems. It is also known as the Consumer Credit Protection Act. The Equal Credit Opportunity Act is a federal law which attempts to make the granting of credit fair by prohibiting the denial of credit based on the applicant's gender, race, age, martial status, or national origin.SOURCE: FI:002SOURCE: FI LAP 2—Credit and Its Importance

33. CTo create text documents. Most word-processing software programs are designed to be used to create text documents, although some have limited graphic capabilities. Businesses use word-processing software programs to write letters, memos, reports, business plans, and sales contracts. There are many different word-processing software programs available that enable businesses to create, edit, and store important text documents. Spreadsheet software programs are used to organize numerical information. Database software programs are used to maintain customer lists and catalog personnel records.SOURCE: NF:007SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)

[pp. 162-164]. Woodland Hills, CA: Glencoe/McGraw-Hill.

34. CSummarizes expenses and revenue from sales. A profit-and-loss statement is a business's financial picture that lists all revenue and expenses for a certain time period. A profit-and-loss statement is not the same as a balance sheet. Characteristics of a balance sheet include listing assets and liabilities and showing the owner's financial position.SOURCE: FI:094SOURCE: FI LAP 4—Watch Your Bottom Line (Income Statements)

35. DTo develop new products. Automotive accessory manufacturers often use marketing information to analyze what customers want and need in order to develop new products. Many manufacturers maintain internal records that indicate the types of products that currently are selling well and to which customers are attracted. Manufacturers can use this information to develop similar products that will appeal to specific markets. In order to use marketing information, manufacturers often need to calculate statistics and interpret findings. Manufacturers do not use marketing information to identify new vendors, although vendors are often a source of marketing information.SOURCE: IM:012SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials

(pp. 602-603, 636-637). New York: Glencoe/McGraw-Hill.


1736. C

Describe the target market. The target market is the group of consumers to whom the automotive business wants to sell its products. Businesses use marketing research to determine the size of the target market, its location, and the products the market is most likely to buy. Economic trends can be forecasted by gathering information about past and present economic conditions. Describing the target market does not keep the business up-to-date or maintain its image, although the information could be useful in those efforts.SOURCE: IM:010SOURCE: IM LAP 5—Nature of Marketing Research

37. CInventory. Sales records often contain information about an auto-parts store's inventory, such as which items sold well and at what price level and which items were slow moving and had to be reduced in price in order to sell. Sales records also indicate the inventory turnover rate and profitability of seasonal items. Stores monitor this information in order to make marketing decisions, such as whether to carry a larger quantity of a certain item or to discontinue some items. Sales records do not contain information about personnel, advertising, or investments.SOURCE: IM:184SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p.

508]. Woodland Hills, CA: Glencoe/McGraw-Hill.

38. AAnalyzing. Once an automobile repair business collects marketing information, it must analyze the data in order to make it useful. First, the automobile repair business tabulates or codes the information into a specific format or category. Then, the automobile repair business is able to evaluate or analyze the information and use it to answer the particular issue or problem being researched. For example, if an automobile repair business collects one hundred questionnaires from customers, it would need to analyze the information on the questionnaires before it could use the data. Sampling is a technique for obtaining marketing information. The results of the research are reported after the information is collected and analyzed. Automobile repair businesses often store marketing information in the event that it will be useful at a later date.SOURCE: IM:062SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 616).


39. BDemand. Pricing is an important marketing function because it affects how much profit a business makes on the sale of an automotive good or service. To make a larger profit, businesses cannot simply increase price because as the price of an item increases, demand for it decreases. Therefore, price also affects the demand for a good or service. Price does not affect the product's utility, or usefulness, its source, or its trademark.SOURCE: MK:002SOURCE: MK LAP 1—Work the Big Six (Marketing Functions)

40. DShould the business offer discounts? The price element requires marketers to determine the amount of money they will ask in exchange for their goods or services. This will involve determining how low or how high to set prices; what payment terms to offer; and what, if any, discounts to offer. Storage considerations are related to place decisions. The use of publicity is a promotion consideration. The determination of when research will be conducted is an aspect of the product element.SOURCE: MP:001SOURCE: IM LAP 7—Pick the Mix


1841. B

Group of customers the automotive business seeks to attract. Though a target market may seem to be a sample of the market, it is actually the particular group of customers the business seeks to attract. Knowing the market's direction is helpful to any marketer. And, a discussion of the way a business draws its customers falls under marketing promotion.SOURCE: MP:003SOURCE: IM LAP 9—Have We Met?

42. CIncrease sales this year by 10% over last year. Objectives are the goals an automotive accessory business wants to achieve. Before a business can proceed with the marketing planning process, it must first develop its basic objectives, such as to increase profits by a certain percentage or increase market share by a certain amount. The most effective objectives clearly state what the business hopes to accomplish and within what time period. For example, an effective objective is to increase sales this year by 10% over last year. That is a clear goal to try to achieve. Once the objectives have been developed, businesses continue with the marketing planning process to design and implement strategies to achieve the goals. Hiring more salespeople, developing advertising, and reducing prices are strategies, or plans of action, that the business might use for achieving the objective.SOURCE: MP:006SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 41-42].

Mason, OH: Thomson/South-Western.

43. CSituational analysis. A situational analysis is a determination of an auto-parts store's current business situation and the direction in which the store is headed. Both internal (e.g., personnel) and external (e.g., competition) environmental conditions are evaluated to determine the store's current strengths, weaknesses, opportunities, and threats. Diagnostic summary, conditional assessment, and environmental synopsis are not terms commonly used to describe marketing plan components. SOURCE: MP:007SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an

e-commerce world (7th ed.) [p. 632]. Mason, OH: South-Western.

44. AForecasting methods are hard to understand. Although this point is mentioned frequently as a reason for not using sales forecasts, it is really not a legitimate reason. Some forecasting methods are complex or require expertise; however, there are other methods which are fairly simple and easy to use. Managers often feel that not enough information is available to forecast sales. However, there are many sources of information for sales forecasting, even for fairly new products. Sales forecasts are particularly important for small businesses whose resources are limited because sales forecasts can provide information about cash flow, inventory levels, and allocation of limited resources that can make or break a company. Sales forecasts can be quite inexpensive when qualitative forecasting methods are used since people will offer their opinions freely.SOURCE: MP:013SOURCE: IM LAP 3—Nature of Sales Forecasts


1945. D

Create a new revenue source. By selling its products from an additional location or source (the web site), the auto-parts business creates an opportunity to reach more customers, which might result in more sales. Developing a web site does not necessarily reduce marketing expenses or lower taxes for the business. Product mix refers to the particular assortment of products that a business offers in order to meet the needs of its markets and its company goals.SOURCE: NF:003SOURCE: Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.)

[pp. 140-142]. Upper Saddle River, NJ: Prentice Hall.

46. BCo-signer. When a borrower agrees to a loan, s/he is making a contractual agreement to pay back the loan in a certain manner within a specific period of time. When the borrower does not have the collateral or credit history to obtain the loan, the lender often requests that another person co-sign for the loan. A co-signer is responsible for paying back the loan if the borrower does not. The credit union, Treasury Department, and debt collectors are not responsible for repaying a loan unless they agree to be co-signers on loan contracts.SOURCE: FI:063SOURCE: Kapoor, J.R., Dlabay, L.R., Hughes, R.J., & Hoyt, W.B. (2005). Business and personal

finance (pp. 182-183). New York: Glencoe/McGraw-Hill.

47. ADatabase. Database software programs are designed to sort, arrange, and locate a wide variety of information. Many automotive services businesses use database software to store valuable information about customers and arrange it according to various criteria. Businesses can add to this information at any time, sort it alphabetically, or use it to print mailing labels. Spreadsheet software programs are used to organize financial information. Businesses do not use interactive or publishing software to store information about customers.SOURCE: NF:009SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)


48. AIdentify and correct problems. Auto-parts stores usually evaluate the performance of vendors on a regular basis. The benefit is that the evaluation process enables the stores to identify and correct potential problems before they become serious. Furthermore, vendors need to know if they are living up to the stores' expectations. By evaluating performance, stores can provide valuable information to help vendors improve and provide the type of service that stores expect. Stores do not evaluate the performance of vendors in order to purchase discounted goods. Obtaining a lot of information is not effective unless the stores use the information. Stores analyze their volume of work rather than a vendor's volume of work.SOURCE: OP:109SOURCE: Monczka, R., Trent, R., & Handfield, R. (2002). Purchasing and supply chain

management (2nd ed.) [pp. 662-663]. Mason, OH: South-Western.


2049. D

Hazardous waste. Many types of vehicle and petroleum products are considered hazardous waste after they have been used. These products include used motor oil, contaminated gasoline, antifreeze, paint removers, etc. Because the used products are hazardous waste, they must be disposed of properly to prevent them from contaminating the environment. There are strict rules and regulations that companies must follow when disposing of such materials. Some of these products are liquid, expensive, and large; but those are not reasons why it is important to dispose of them properly.SOURCE: OP:088SOURCE: Allegheny Environmental Services. (n.d.). Hazardous Waste Disposal. Retrieved

October 23, 2007, from http://www.lockport-ny.com/Allegheny/hazwaste.htm

50. DMaintaining a clean work area. Keeping aisles clear and file cabinets closed prevents accidents that occur when people trip over or bump into things. Following proper health standards, lifting objects properly, and driving safely are other types of accident prevention.SOURCE: OP:009SOURCE: RM LAP 3—Handling Accidents

51. BVariable. Variable costs go up or down in response to increases or decreases in sales. Fixed and semivariable costs are not affected by sales commissions. Operating costs are the expenses involved in running the business.SOURCE: OP:024SOURCE: MN LAP 57—Operating Expenses

52. DPrepare a budget. Most projects have costs involved. However, before asking everyone you know to make a contribution, it is important to prepare a budget. By developing a budget, project managers will have an accurate picture of what it will cost to do the project. Then, they can ask others for the financial resources to cover the costs. It is not necessary to open an account or arrange for credit before asking for contributions. Holding a fund-raiser is one way to obtain financial assistance after preparing a budget to find out the amount of money that will be needed.SOURCE: OP:003SOURCE: QS LAP 19—Get What You Need

53. AEfficiency. Orderly and systematic behavior increases efficiency because employees have their materials in order, know where to find things, and plan the use of their time. This approach reduces stress, the number of mistakes, and the amount of clutter.SOURCE: PD:009SOURCE: HR LAP 4—Orderly and Systematic Behavior

54. ACareer. Career goals are goals connected with work, e.g., added responsibility, a new job title, or a promotion. An example of a personal goal might be to improve self-control in trying situations. To run two miles every day is an example of a physical goal. To make new friends is an example of a social goal.SOURCE: PD:018SOURCE: HR LAP 6—Goal Setting


2155. A

Addressing them by name. Addressing personnel directors by their names is an effective technique because the directors often feel that the job seekers are more interested in the positions because they have taken the time to find out the directors' names. Also, letters addressed to a specific person are more likely to be read by that person than letters that are addressed to a general title or office. Usually, it is not appropriate for a job applicant to invite a prospective employer to lunch, ask for an immediate response to an inquiry, or request salary information.SOURCE: PD:026SOURCE: Daggett, W.R., & Miles, J.E. (1998). The dynamics of work: Introduction to occupations

(2nd ed) [pp. 64-66]. Cincinnati: South-Western Educational.

56. CMention it in a follow-up letter. Applicants should send follow-up letters to interviewers after interviews to thank them for the opportunity to interview, to reinforce key points mentioned during the interview, to express interest in the position, and to mention important topics that were omitted during the interview. Phoning or going back to the business requires interviewers to stop what they are doing, thus taking unnecessary time away from their jobs. The follow-up letter could be faxed if the interviewer is planning to make an immediate hiring decision; however, the omission should be addressed as part of a follow-up letter rather than being sent as a separate, urgent document.SOURCE: PD:029SOURCE: Bailey, L.J. (2003). Working: Career success for the 21st century (3rd ed.) [p. 71].

Mason, OH: South-Western.

57. AReading business reports. Free time is the time that is left over after automotive services employees have completed their tasks or when a planned activity is canceled. When free time occurs, employees should be prepared to use it effectively. Reading business reports during a flight to a sales meeting is an example of good use of free time. Watching an in-flight movie, listening to recorded music, and taking a short nap are examples of leisure-time activities.SOURCE: PD:019SOURCE: OP LAP 1—About Time (Time Management in Business)

58. COverseeing the work of the technicians. The shop supervisor at an automobile dealership manages the technicians who perform repair work in the service department. The supervisor is usually a technician who has many years of experience doing repair work and also has the ability to oversee the work of others. The supervisor assigns work to the technicians, checks their work, and keeps the repair shop running smoothly. On occasion, the supervisor may also do repair work. The service manager is responsible for providing service to customers and working with factory representatives. The shop supervisor reports to the service manager rather than to the sales manager.SOURCE: PD:043SOURCE: Stockel, M.W., Stockel, M.T., & Johanson, C. (2000). Auto fundamentals (pp. 563-564).

Chicago: Goodheart-Willcox.

59. AReading trade journals. Supervisors should encourage employees to stay up-to-date by consulting all available outside sources of information. Customers are not always reliable indicators. Few employees would spend either time or money going to other cities for merchandising information. It would be inappropriate to consult the competition although observing their activities could be helpful.SOURCE: PD:036SOURCE: CD LAP 1—Trade Associations and Professional Organizations


2260. B

Pricing. Pricing is the determination of an exchange price at which the buyer and seller perceive optimum value for a good or service. Setting prices that are reasonable, competitive, and appropriate to the quality of the product is important to the success of the business. Production is the process of producing goods and services. Profit is the monetary reward a business owner receives for taking the risk involved in investing in a business. Persuasion is one of the purposes of promotion.SOURCE: PI:001SOURCE: PI LAP 2—Pricing

61. BEliminates competition in a free enterprise system. In many countries, price fixing is an unethical and illegal business agreement in which businesses agree on prices of their goods or services, resulting in little choice for the consumer. An important characteristic of a free enterprise economic system is that it encourages business growth and competition. Although price fixing might result in changes in consumer demand, fluctuations are not an unusual occurrence and can be attributed to many other factors. Price skimming is a pricing strategy that deliberately sets a new product at a very high price. Price fixing does not always force consumers to purchase nondurable goods in bulk.SOURCE: PI:015SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p.


62. DAnti-dumping. Predatory pricing is the practice of pricing and selling (“dumping”) goods below cost in order to reduce competition. Many countries (e.g., U.S. and Canada) encourage competition and fair trade and have laws that prohibit businesses from engaging in this type of pricing. Puffery is a promotion technique in which a product's benefits and/or attributes are exaggerated. Captive-product pricing is a strategy in which a business prices a primary product low and prices the supplies that are needed for the product very high so it can compensate for the low-priced primary product. Price skimming is a pricing strategy that involves setting prices higher than those of the competition. SOURCE: PI:017SOURCE: Answers.com. (n.d.) Dumping. Retrieved October 22, 2007, from

http://www.answers.com/topic/dumping

63. CIntroduction. This is the product life cycle stage when the product first appears in the marketplace. Products in this stage are priced higher to enable the business to recover its investment. In the growth stage, sales rise rapidly and prices may be reduced. In the maturity stage, sales peak and then increase at a slower rate or start to decline. Decline is the product life cycle stage in which sales and profits fall rapidly, and prices are reduced to clearance level.SOURCE: PI:002SOURCE: PI LAP 3—Factors Affecting Selling Price

64. CPackaging. Packaging is placing the product in a protective wrap or container before it is offered for sale. Packaging is an important function of product/service planning because the package must be eye-catching in order to attract purchasers. The cost of packaging may be expensive, but studies indicate that good packaging can significantly increase sales. Labeling is attaching printed information about the product to the product. Handling is loading and unloading goods. Grading is the process of rating products according to certain established standards or characteristics.SOURCE: PM:001SOURCE: PP LAP 5—Product/Service Planning


2365. A

Mass customization. Computerization and the technology of mass production have created the method of mass customization, which allows businesses to produce customized automotive products for one customer or only a very few customers. Businesses that use a mass-customization method can produce large quantities of one product in many different varieties. This method allows businesses to meet the individual needs of many customers by making variations of one product. Automatic production, computerized robotics, and intermittent conversion are not methods that allow businesses to produce products that are specialized for a very few customers.SOURCE: PM:039SOURCE: Zikmund, W.G., & d'Amico, M. (1999). Marketing (6th ed.) [p. 235]. Cincinnati: South-

Western College.

66. BLimited. A warranty that does not cover the entire automobile but covers only specific parts or certain repairs is a limited warranty. An implied warranty is an unwritten warranty that is understood by the consumer and the seller that the product will perform as expected. A full warranty is one which covers the entire product. Implied, limited, and full warranties are all classifications of product warranties.SOURCE: PM:020SOURCE: PP LAP 4—Warranties and Guarantees

67. BHow to contact government agencies. There are many city, state, and federal government agencies that regulate the rights of consumers, but these agencies are not listed in a warranty. Explaining what kind of service or repairs are included, how long the warranty is in effect, and where to take or send the merchandise for service should be included in a written warranty.SOURCE: PM:017SOURCE: PP LAP 7—Consumer Protection in Product Planning

68. DDeplete slow-moving items from its inventory. Mixed product bundling is the practice of packaging different products together. Automotive accessory stores price the packages so that customers pay less for bundled items than they do if they purchase each item separately. A store that wants to deplete slow-moving stock might package the items with items that sell well, in order to eliminate the slow-moving items from its inventory. Stores generally want to deplete slow-moving inventory because it costs them money to store the products for long periods of time. Bundling strategies do not necessarily lower advertising expenses and publicity efforts, nor do bundling strategies necessarily build ongoing customer relationships. Product substitution occurs when a salesperson suggests a product other than the original request when the store does not have the item requested. Product bundling practices do not always involve product substitution activities.SOURCE: PM:041SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p.


69. ASmall auto-repair shops. There are many small auto-repair shops, and they are the main buyers of aftermarket parts. Auto-parts and accessory distributors supply both used and new parts to various businesses. The used-parts sector is a developing market for aftermarket products and caters to pre-1990, U.S. made cars. New car dealers with repair shops are users of new parts only.SOURCE: PM:070SOURCE: Battle, J. (1999, November). Exploring the Latin American Aftermarket. Retrieved

October 24, 2007, fromhttp://www.highbeam.com/library/docO.asp?docid=1G1:58162163&refid=ink_ot_auto_s3&skeyword


2470. B

Service. Luxury car dealers, such as Lexus, often provide their customers with free transportation while their cars are being serviced. However, most midpriced car dealerships do not usually provide free transportation. A midpriced car dealer that offers a service that its competitors do not, is setting itself apart in terms of the level of service that it provides. Free transportation does not necessarily emphasize safety, loyalty, or performance.SOURCE: PM:042SOURCE: Kotler, P., & Armstrong, G. (1999). Principles of marketing (8th ed.) [pp. 220-221].

Upper Saddle River, NJ: Prentice Hall.

71. CRational and emotional. Brands appeal to people's heads and hearts. We can recognize and think about tangible product characteristics—for example, the color, the size, or the texture. But with many brands, they are also "speaking" to and connecting with us on an emotional level, making us feel, or want to be, more intelligent, more athletic, more attractive. The real power of brands is in their emotional appeal. Brands are not thought of as appealing to consumers on black-and-white, physical and spiritual, or good and evil levels.SOURCE: PM:021SOURCE: PM LAP 6—It's a Brand, Brand, Brand World! (The Nature of Branding)

72. A$309,120. Businesses plan sales based on past sales, economic conditions, and any other environmental circumstances that may affect the business. Since this firm's sales are expected to increase 12% over the previous year, planned sales can be determined by multiplying (12% or .12 x $276,000 = $33,120) and adding this figure to previous sales ($33,120 + $276,000 = $309,120).SOURCE: PM:061SOURCE: Berman, B., & Evans, J.R. (1998). Retail management: A strategic approach (7th ed.)


73. BGross profit. Gross profit is the amount of profit left after cost of goods is subtracted from total income. This figure is not used in calculating stock turnover rate. Stock turnover is determined by dividing the number of inventories into total stock to calculate average stock. Stock turnover rate = net sales ÷ average inventory.SOURCE: PM:062SOURCE: Stull, W.A. (1999). Marketing and essential math skills: Teacher's edition (pp. 181-182,

235). Cincinnati: South-Western Educational.

74. COverbuying. Open-to-buy is the amount of money left to spend during a specified period of time. One of the advantages of calculating open-to-buy on a regular basis is to avoid buying more than allowed for in the merchandising budget. Because most businesses do not buy all of their goods at one time, they need to know how much money is left to buy other items. If they do not calculate open-to-buy each time they make a purchase, they run the risk of overbuying and spending more than was allocated. Budgeting is estimating income and expenses for a specific period of time. Forecasting is predicting. Purchasing is buying.SOURCE: PM:064SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 487-



2575. C

To get the best price. An important factor that auto-parts stores consider when ordering merchandise is the price. Most stores try to buy from vendors that offer the best price for the quality of merchandise. In some cases, that may mean continuing to buy from the same vendors as in the past, but stores should not choose vendors based solely on tradition. Stores should choose vendors that will help them to be more competitive, not to avoid competition. Customers are generally unaware of the vendors from whom stores buy their products.SOURCE: PM:263SOURCE: Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.)


76. BPromotion. Promotion is defined as communicating information about goods, services, images, and/or ideas to achieve a desired outcome. Promotional activities should be relevant to the market, and their purpose is to persuade customers to buy. Marketing incorporates promotion as one element of the marketing mix.SOURCE: PR:001SOURCE: PR LAP 2—Promotion

77. CPersuade consumers to buy a good or service. Product promotion is used to stimulate consumer purchases of goods or services. Informing the public of the company's future and demonstrating the firm's social responsibility are examples of institutional promotion. Institutional promotions might also be used to enhance morale and recruit employees.SOURCE: PR:002SOURCE: PR LAP 4—Know Your Options (Types of Promotion)

78. AIntroduction. The business needs to make prospective customers aware of a new product when it is in the introduction stage. The growth stage begins when sales for the product are rising and competing products appear on the market. The maturity stage occurs when the product has become well established. When newer products are entering the market and sales of the original product are dropping, the original product is in the declining stage.SOURCE: PR:003SOURCE: PR LAP 1—Promotional Mix

79. DBribery. Bribery refers to the activities in which a person engages that are meant to influence the actions of another person. A manager who takes potential customers out for lavish dinners and buys them expensive gifts might be viewed as engaging in bribery because s/he might be attempting to use these activities to obtain new customers. Bribery is often considered unethical business behavior because it creates an unfair advantage in the marketplace. Some, but not all, countries have laws regulating bribery practices. Puffery is the practice of using exaggerated expressions to describe a product or its features (e.g., "the best"). When a person makes accusations or negative comments about another person or entity, it is often called slander. Fraud is a deception purposely carried out to secure unfair or unlawful gain.SOURCE: PR:099SOURCE: Semenik, R.J. (2002). Promotion and integrated marketing communications (pp. 213,

219). Mason, OH: South-Western.


2680. C

Opt-in e-mail. Opt-in e-mail refers to the electronic promotional messages that are sent with a recipient's permission and allows the recipient to request removal from the subscriber list at any time. Opt-in e-mail is a good way for a business to promote goods and services because it allows the business to send information to customers who request the information. This method is also a quick and inexpensive way to send promotional messages. Unsolicited junk mail refers to the promotional messages that customers do not request. Cookies are text files that are put on a web-site visitor's computer hard drive and then later retrieved during subsequent visits to the site in order to track Internet behavior. Instant messaging is the ability to send, receive, and respond to computer text messages in real time.SOURCE: PR:100SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an

e-commerce world (7th ed.) [p. 505]. Mason, OH: South-Western.

81. DIt has a high repeat exposure rate. Traffic passing certain spots contains a large percentage of drivers who are repeatedly exposed to the message. Thus, a high penetration rate can be achieved in a specific geographic area. The usage rate of outdoor advertising is not increasing. The message is only seen for an average of five or six seconds, and many people feel that billboards detract from the beauty of an area.SOURCE: PR:007SOURCE: PR LAP 3—Ad-quipping Your Business

82. BTaken to a storage area. Props should be properly stored. They should not be left in the display because they might be lost or misplaced. Props are too expensive to be thrown away. If they are put in different departments, they may be hard to relocate when they are needed again.SOURCE: PR:054SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 393).


83. BIlluminate the merchandise. Display workers should install lighting fixtures in such a way that the lights will show off the merchandise in the display to its best advantage. If this is done effectively, customers will look at the merchandise rather than at the lights. The amount of light should make signs easy to read rather than emphasizing them. It is not always possible to install lights in such a way that they are easy to remove.SOURCE: PR:047SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 392-


84. AMost promotional plans include more than one type of promotion. Very few automotive services businesses can focus on only one type of promotion because each type serves a different purpose for the firm. A popular combination is advertising and personal selling. The type of promotion needed will change as the product moves through its life cycle. For example, promotion for a product in the introductory stage should provide consumers with much more information than will be needed after the product has moved on to acceptance and maturity. The promotional budget is an important part of the promotional plan. The plan's promotional objectives should be based on its marketing objectives.SOURCE: PR:073SOURCE: Burrow, J.L. (2002). Marketing (pp. 419-420). Mason, OH: South-Western.


2785. B

To create interest among customers. One of the main reasons for coordinating promotional activities is to create enough interest among customers that they will want to visit the auto-parts store. Coordinated advertising, special events, and other promotions are designed to create in customers the desire to purchase goods and services. Collecting demographic information, developing long-term forecasts, and planning inventory control programs are not purposes of coordinating promotional activities.SOURCE: PR:076SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)


86. CInvolves interaction with customers. Selling is referred to as personal selling because salespeople interact with their customers and try to meet their individual needs. Providing specific product information is one of the ways salespeople meet those needs. Selling seldom follows a standardized format except in situations such as telemarketing. Personal selling can take place in a variety of places, including the home, but it is the interaction with customers that gives it its name.SOURCE: SE:017SOURCE: SE LAP 117—Sell Away (The Nature and Scope of Selling)

87. AIgnoring a customer's request for information. Tire and battery store salespeople who do not provide good service are more likely to offend customers, which often results in a lost sale. Customers are less likely to return to the store if they feel that the salesperson is rude, lacks product knowledge, or ignores a request for information. When salespeople return calls in a timely manner, answer questions honestly, and conduct follow-up activities, customers are receiving good customer service and are likely to purchase from the store again.SOURCE: SE:076SOURCE: SE LAP 130—Go Beyond the Sale

88. DClientele. The foundation of most businesses, such as automobile dealerships, is a loyal clientele. Suppliers are companies from which a business purchases supplies. Employees, the people who work for a business, may be part of the company's clientele. Competitors are those companies engaged in a business similar to yours.SOURCE: SE:828SOURCE: SE LAP 115—Keep Them Loyal (Building Clientele)

89. CIncreasing the price of. Pollution problems or health concerns might influence a company to change its products, thereby making it necessary to increase the selling price. Such social concerns are external factors operating in the business environment over which the business has little or no control. Adding costly devices to new models would prevent the manufacturer from offering discounts, lowering the price, or advertising factory rebates.SOURCE: SE:932SOURCE: SE LAP 121—Selling Policies


2890. C

Electronic mail. Electronic mail (e-mail) is the transmission of messages across computer networks. Because e-mail is quick and cost-efficient, automotive services businesses often use e-mail to send important information (e.g., sales proposals) to their customers. Businesses may send written documents by fax machine, not telephone. Videoconferencing involves audio and video communication that occurs simultaneously in different locations. A courier is a transportation service. Videoconferences and overnight courier services are not quick, cost-efficient ways to deliver a sales proposal to a distant location.SOURCE: SE:107SOURCE: Futrell, C.M. (2001). Sales management: Teamwork, leadership, and technology (6th

ed.) [p. 250]. Mason, OH: South-Western.

91. BSelling regulations. Businesses often develop brochures to promote their automotive products, but the information in the brochures must be accurate or else the business might be violating certain selling regulations. Stating that an automotive product performs well under all circumstances might be considered misrepresentation or over-exaggeration of the product's capabilities because the business is actually stating that the product works all of the time, under all circumstances, and without any problems. If the business cannot support that statement with facts and statistics, it might be guilty of misrepresentation which is a violation of selling regulations. To be safe, a business might qualify the statement to indicate that the product performs well in most situations, or 95% of the time, when used correctly. Stating that a product performs well under all circumstances is not a violation of warranty specifications, advertising guidelines, or publishing rules.SOURCE: SE:108SOURCE: Futrell, C.M. (1999). Fundamentals of selling: Customers for life (6th ed.) [pp. 89-94].

Boston: Irwin/McGraw-Hill.

92. BProduct itself. Carefully examine your automotive accessory products to obtain product information that you can use in selling. Although reading product descriptions on packages, hangtags, or labels is valuable, the use of first-hand product knowledge is often more convincing in helping customers make buying decisions.SOURCE: SE:062SOURCE: Townsley, M. (2002). Retail: Business 2000 (p. 96). Mason, OH: South-Western.

93. AConducting demonstrations. Factory representatives work for the manufacturer. It is their job to sell the manufacturer's products to the auto-parts store. Furthermore, factory representatives often help the stores resell the products by providing additional services. One of these services might be conducting demonstrations to show customers how the products operate. Such services are intended to increase sales for the auto-parts store which lead to increased sales for the manufacturer. Stores usually handle customer complaints. However, if the complaint concerns a major defect, the store might involve the factory representative to resolve the problem. Factory representatives do not organize a store's shelf space or monitor its inventory.SOURCE: SE:170SOURCE: Futrell, C.M. (1999). Fundamentals of selling: Customers for life (6th ed.) [p. 26].

Boston: Irwin/McGraw-Hill.


2994. B

Fuse. A fuse is a safety device in an automobile's electrical system that allows a limited amount of current to flow through it. If more than the right amount of current flows through the fuse, the fuse will blow or melt, thereby breaking the electrical circuit. The fuse protects other parts of the circuits from damage from excessive amounts of current. Watt is a unit of measurement of electrical power. A rotor is part of a disc break. A strut is a brace used between a control arm and the frame.SOURCE: SE:174SOURCE: Stockel, M.W., Stockel, M.T., & Johanson, C. (2000). Auto fundamentals (p. 306).

Chicago: Goodheart-Willcox.

95. DEngine. An automobile's engine converts energy into motion. The engine includes the crankshaft, which supports the connecting rods and turns the up-and-down movement of the pistons into motion. A compressor is a type of pump. A battery contains cells that produce electricity. Ignition involves lighting a charge to start an engine.SOURCE: SE:178SOURCE: Duffy, J.E. (2000). Modern automotive technology (pp. 142-144). Chicago: Goodheart-

Willcox.

96. DSelf-service. The type of store and the merchandise for sale are important factors in determining when to approach the customer. In self-service stores, the customer is usually not approached until s/he requests help. Specialty boutiques and owner-operated stores are service-oriented; therefore, the customer is usually approached promptly. Customers usually do not visit mail-order stores.SOURCE: SE:110SOURCE: SE LAP 101—Opening the Retail Sale

97. ACustomers' buying signals. Customers give clues called buying signals that indicate they are ready to buy. These may be facial expressions, comments, or other indications of their interest in the product. The time required to reach this point and the number of objections handled would vary with the circumstances. The salesperson should learn to watch for buying signals in order to know when to try to close the sale. Salespeople try to close before customers lose interest in buying.SOURCE: SE:895SOURCE: SE LAP 107—Closing Sales

98. A$18.89. The total cost of the item to the customer equals the selling price plus state tax and county tax. Add the two tax percentages together to determine the total percent (4% + 1% = 5%). Multiply the selling price by the combined tax, and add that figure to the selling price ($17.99 x 5% = $.899 or $.90; $17.99 + $.90 = $18.89).SOURCE: SE:116SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 339-

340).New York: Glencoe/McGraw-Hill.

99. B"Would you spell your name for me?" By using questions and particular phrases as "for me" or "Do you happen to have...," the customer-service representative makes the request of information a personal favor, and that helps to build rapport. The other responses are examples of "command language" or language that demands an action. Command language doesn't build rapport.SOURCE: SE:835SOURCE: Miculka, J.H. (1999). Speaking for success (pp. 110-112). Cincinnati: South-Western

Educational.


30100. C

Executive management. Executive, or top-level, management is composed of all managers who are responsible for the entire automotive services company. They must chart the course and provide leadership in order for the business to be successful. Middle management is composed of managers who report to top-level management and who have supervisors who report to them. Supervisory, or first-level, management works directly with employees who carry out the business's routine work.SOURCE: SM:001SOURCE: BA LAP 6—Manage This!

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