Question 1

When do retailers using a high/low pricing strategy use markdowns?

Accepted Answer

Retailers using a high/low pricing strat...

Question 2

________________________ include markdowns,discounts to employees and customers,and inventory shrinkage (due to shoplifting,breakage,or loss).

Accepted Answer

The answer of ________________________ include markdowns,discounts to employees and customers,and...

Question 3

When a retailer charges different prices in different stores,markets,or zones it is called _____________________.

Accepted Answer

The answer of When a retailer charges different prices in...

Question 4

What are the two reasons retailers take markdowns?

Accepted Answer

Retailers' reasons for taking ...

Question 5

Which of the following would be considered an example of a second-degree price discrimination strategy?

Accepted Answer

A)   Variable pricing
B)   Leader pricing
C)   Contribution pricing
D)   Break-even pricing
E)   All of these are examples of a second-degree price discrimination strategy.F) B) and C)
G) C) and D)

Question 6

Which of the following is an example of a variable cost for a retailer of electronic equipment?

Accepted Answer

A)   The display tables for mounting the computer, monitor, and printer
B)   The cost of coaxial cables to connect the computers and their peripheral devices
C)   The store rent charged by the mall
D)   The cost of the licenses required by the local government
E)   All of theseF) A) and D)
G) C) and D)

Question 7

What can small retailers do to compete with Walmart's low prices?

Accepted Answer

To compete with Walmart's low ...

Question 8

What are included in "reductions"?

Accepted Answer

A)   The cost of alterations
B)   The cost of goods sold
C)   Shoplifting costs
D)   Taxes
E)   All of theseF) A) and B)
G) D) and E)

Question 9

What is zone pricing,and why do retailers use it?

Accepted Answer

Zone pricing means charging di...

Question 10

Conrad prices his sportswear using the ______________ method.When the merchandise arrives,he doubles the cost of the merchandise to obtain the original retail selling price.

Accepted Answer

A)   benchmark
B)   customer-oriented
C)   doubling
D)   keystone
E)   leaveningF) A) and C)
G) B) and C)

Question 11

What is a limitation of the rules-based approach for taking markdowns?

Accepted Answer

A)   The rules-based approach is based upon gross margin
B)   The approach prohibits input from the vendor
C)   The approach does not follow a fixed schedule
D)   Its only goal is to clear inventory
E)   The approach assumes that items in a category do not exhibit the same behaviourF) A) and C)
G) A) and B)

Question 12

What are the ways marked-down merchandise can be consolidated?

Accepted Answer

Marked-down merchandise can be consolida...

Question 13

How can the use of an EDLP strategy increase a retailer's profit margin?

Accepted Answer

A)   Employees do not have to continually make price reductions
B)   EDLP increases the large variations in demand caused by frequent sales
C)   The stable prices caused by EDLP requires the use of more weekly advertising
D)   Employees provide less customer service because of the sale-stimulated numbers of people
E)   A more predictable demand increases the likelihood of stockoutsF) B) and E)
G) C) and E)

Question 14

Reductions in the initial retail price are called:

Accepted Answer

A)   sales
B)   price decreases
C)   markdowns
D)   merchandise effect
E)   liquidationF) B) and E)
G) B) and D)

Question 15

What are two problems associated with variable pricing?

Accepted Answer

Problems associated with using variable ...

Question 16

Give it to Me Baby is a store that features memorabilia from the 1980s.On estimated net sales of $92,500 next year,the owner of Give it to Me Baby has a gross cost of goods sold of $48,000.Their maintained markup percentage should be:

Accepted Answer

A)   42.0 percent
B)   48.11 percent
C)   53.6 percent
D)   92.71 percent
E)   21.52 percentF) B) and E)
G) B) and C)

Question 17

The Bow Shop caters to the archery enthusiasts.It has estimated net sales of $45,300.The maintained markup used by the store is 60 percent of net sales.Reductions are estimated to be 12 percent of net sales.Calculate the store's initial markup.

Accepted Answer

A)   32.66 percent
B)   52 percent
C)   60 percent
D)   64.29 percent
E)   72 percentF) A) and B)
G) A) and C)

Question 18

What benefits does EDLP have in relation to high/low pricing?

Accepted Answer

(1)An EDLP strategy enables retailers to...

Question 19

Because of markdowns,discounts to employees and customers,and merchandise reductions,the:

Accepted Answer

A)   maintained markup is always less than the gross margin
B)   initial markup is always higher than the maintained margin
C)   sell-through analysis is necessary to determine the appropriateness of a location site
D)   value of average inventory at cost is less than its value at retail
E)   initial markup is always lower than maintained markupF) A) and B)
G) B) and C)

Question 20

Which of the following is a way to determine the most profitable price for a product?

Accepted Answer

A)   Examine a competing firm to determine the price
B)   Conduct focus groups
C)   Enter low into the market and increase price through the product's life cycle
D)   Conduct a pricing experiment
E)   Price merchandise based upon manufacturer's suggestionsF) A) and C)
G) C) and E)

Exam 12: Retail Pricing

What are included in "reductions"?

Correct AnswerverifiedShow Answer

What can small retailers do to compete with Walmart's low prices?

Correct AnswerverifiedTo compete with Walmart's low ...View AnswerShow Answer

________________________ include markdowns,discounts to employees and customers,and inventory shrinkage (due to shoplifting,breakage,or loss).

Correct AnswerverifiedShow Answer

When do retailers using a high/low pricing strategy use markdowns?

Correct AnswerverifiedRetailers using a high/low pricing strat...View AnswerShow Answer

Which of the following is an example of a variable cost for a retailer of electronic equipment?

Correct AnswerverifiedShow Answer

Because of markdowns,discounts to employees and customers,and merchandise reductions,the:

Correct AnswerverifiedShow Answer

What are two problems associated with variable pricing?

Correct AnswerverifiedProblems associated with using variable ...View AnswerShow Answer

What are the two reasons retailers take markdowns?

Correct AnswerverifiedRetailers' reasons for taking ...View AnswerShow Answer

Which of the following is a way to determine the most profitable price for a product?

Correct AnswerverifiedShow Answer

How can the use of an EDLP strategy increase a retailer's profit margin?

Correct AnswerverifiedShow Answer

When a retailer charges different prices in different stores,markets,or zones it is called _____________________.

Correct AnswerverifiedShow Answer

Conrad prices his sportswear using the ______________ method.When the merchandise arrives,he doubles the cost of the merchandise to obtain the original retail selling price.

Correct AnswerverifiedShow Answer

Reductions in the initial retail price are called:

Correct AnswerverifiedShow Answer

The Bow Shop caters to the archery enthusiasts.It has estimated net sales of $45,300.The maintained markup used by the store is 60 percent of net sales.Reductions are estimated to be 12 percent of net sales.Calculate the store's initial markup.

Correct AnswerverifiedShow Answer

What are the ways marked-down merchandise can be consolidated?

Correct AnswerverifiedMarked-down merchandise can be consolida...View AnswerShow Answer

What is zone pricing,and why do retailers use it?

Correct AnswerverifiedZone pricing means charging di...View AnswerShow Answer

Which of the following would be considered an example of a second-degree price discrimination strategy?

Correct AnswerverifiedShow Answer

What is a limitation of the rules-based approach for taking markdowns?

Correct AnswerverifiedShow Answer

What benefits does EDLP have in relation to high/low pricing?

Correct Answerverified(1)An EDLP strategy enables retailers to...View AnswerShow Answer

Give it to Me Baby is a store that features memorabilia from the 1980s.On estimated net sales of $92,500 next year,the owner of Give it to Me Baby has a gross cost of goods sold of $48,000.Their maintained markup percentage should be:

Correct AnswerverifiedShow Answer

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To compete with Walmart's low ...
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Retailers using a high/low pricing strat...
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Problems associated with using variable ...
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Retailers' reasons for taking ...
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Correct Answer
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Marked-down merchandise can be consolida...
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Zone pricing means charging di...
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Correct Answer
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Correct Answer
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(1)An EDLP strategy enables retailers to...
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Correct Answer
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