| A | B |
|---|
| Businesses should study the products and services offered by competing businesses in order to determine what to buy. | True |
| Payment terms stated on an invoice as "net 30 days" means that the buyer must make a payment on the account every month. | False |
| For wholesalers and retailers, the cost of goods sold is the price they pay their supplier to buy the product plus the cost of transporting it to their location for resale to their customers. | True |
| To determine a price that will earn a specific profit, the business must first determine the costs of producing and marketing the product, plus all related operating expenses. | True |
| Salespeople need to be well informed and knowledgeable about the products and services they represent. | True |
| Consider a useful guide in determining what to purchase | Feedback from customers |
| Consider a useful guide in determining what to purchase | Company records |
| Consider a useful guide in determining what to purchase | Comparison studies of competing businesses |
| A price reduction that manufacturers give to their channel partners in exchange for additional services | trade discount |
| Purchasing snow blowers in the summer to help the manufacturer balance production and inventory levels often qualifies the buyer | seasonal discount |
| The actual price a customer pays for a product | selling price |
| For manufacturers, the total cost of the materials, operations, and personnel used to make a product | cost of goods sold |
| The cost of goods sold plus operating expenses plus net profit equals the | selling price |
| On an invoice, credit terms that require the buyer to pay in full in 30 days but would grant the buyer a 2 percent discount for paying within 10 days would be expressed | 2/10, n/30 |
| Examples of operating expenses | Advertising, Taxes, Depreciation |
| The manufacturer of a product that is very popular will benefit from pricing based on | consumer demand |
| An example of mass media advertising | Network and local TV |
| Example of a buying motive | Desire for good health |
| Selling is successful when | the customer is satisfied with the purchase |
| Follow-up after a sale includes | checking with the customer to make sure an order is correct, sending a thank-you note to the customer after a purchase |
| A promotional activity designed to familiarize customers with a new product and to create a demand for it in local businesses | product samples |
| In self-service merchandising, customers are persuaded to buy through | merchandise displays and labels |
| Amount by which the original selling price is reduced before sale. | markdown |
| Reduction in price given for paying by a certain date. | cash discount |
| Advertising that violates the law. | false advertising |
| Difference between selling price and all costs and expenses. | net profit |
| Advertising designed to change a false impression left by earlier misleading information. | corrective advertising |
| Providing all information that allows consumers to make an informed buying decision. | full disclosure |
| Amount added to the cost of goods sold to calculate a selling price. | markup |
| Difference between selling price and cost of goods sold. | margin |
| Price reduction given to channel partners in exchange for additional services. | trade discount |
| Cost to produce a product or buy it for resale. | cost of goods sold |
