Question 1

As a means of creating a differential advantage, some retailers have responded to their customers' needs by creating formats that emphasize low prices. Which of the following would fall into these formats?

Accepted Answer

A)   Radio Shack, Moores, and Tip Top Tailors
B)   Hudson's Bay, Sears, and Winners
C)   Target, Walmart, and Costco
D)   Sportchek, La Senza, and Canadian Tire
E)   Old Navy, Gap, and Banana RepublicF) A) and C)
G) B) and C)

Question 2

A pricing experiment:

Accepted Answer

A)   cannot be performed if the retailer uses POS terminals
B)   is a less accurate method of determining buyer response to price changes than a consumer panel
C)   is a method of determining the most profitable price for a product
D)   is useful for obtaining data for a cost-oriented pricing strategy
E)   is described by all of theseF) B) and E)
G) All of the above

Question 3

When making a good markdown decision, a retailer needs to:

Accepted Answer

A)   limit markdowns, as they hinder customer loyalty
B)   rely exclusively on the computer software designed for optimal pricing
C)   consider only the rules-based approach because it has proven its reliability
D)   partner with the vendors to coordinate deliveries and help share the financial burden of the markdowns
E)   heed the opinions of the consumer groups who monitor pricing practicesF) A) and D)
G) D) and E)

Question 4

What is a benefit of markdowns for a department store?

Accepted Answer

A)   It is a way to make room for new merchandise.
B)   It increases customers' traffic.
C)   Markdowns generate cash flow to pay for new merchandise.
D)   It rids the store of obsolete merchandise.
E)   All of these.F) None of the above
G) D) and E)

Question 5

Which of the following is a benefit of price lining?

Accepted Answer

A)   The merchandising task is simplified
B)   It can be used to get customers to "trade up" to a more expensive model
C)   Confusion from multiple price choices is eliminated
D)   Price lining gives buyers greater flexibility
E)   All of these are benefits of price liningF) A) and B)
G) All of the above

Question 6

As Jerome was leaving Ed's Electric, he noticed a bulletin board that featured small applications that he can send to the manufacturer with his receipt and receive a portion of what he spent on his digital TV back in the mail. What is this returned money called?

Accepted Answer

A)   A coupon
B)   A rebate
C)   A zone price
D)   A multiple-unit price
E)   A price bundleF) A) and B)
G) None of the above

Question 7

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

Accepted Answer

Retailers using a high/low pricing strat...

Question 8

Jessica runs a neighbourhood produce stand in a downtown neighbourhood. With the recent layoffs, she has become popular because she gives her day-old produce to the local charity for struggling members of her community. Obviously, she takes a loss, but what is the benefit from this act of altruism?

Accepted Answer

A)   It has strong public relations benefits
B)   Because of the service to the community, Revenue Canada looks the other way as her write-offs surpass what is acceptable for deductions
C)   The produce doesn't become garbage, attracting vermin
D)   She frequently has homeless members of her community asking for personalized assistance
E)   All of theseF) A) and D)
G) None of the above

Question 9

The competition-oriented method of setting retail prices is useful because it:

Accepted Answer

A)   considers consumers' wants and needs
B)   does not consider individual pricing strategies for each SKU
C)   is designed to achieve a target level of profits
D)   provides an outside check on the marketplace
E)   is quick and simple to useF) A) and D)
G) C) and D)

Question 10

What are the two reasons retailers take markdowns?

Accepted Answer

Retailers' reasons for taking ...

Question 11

Why might a store that specializes in items for the kitchen markdown a line of dishtowels that depict scenes from current Disney movies?

Accepted Answer

A)   The store does not want the merchandise to become obsolete
B)   The store is afraid the dish towels will become too shopworn to sell later
C)   The store bought dish towels that depict movies that its target markets do not admire
D)   The store wants to increase store traffic
E)   All of these are reasonsF) B) and D)
G) B) and C)

Question 12

What is one way some customers initialize first-degree price discrimination?

Accepted Answer

A)   Threatening to shop elsewhere
B)   Haggling
C)   Bargain basement shopping only
D)   Shoplifting
E)   Walking outF) A) and C)
G) B) and C)

Question 13

Examples of second-degree price discrimination include:

Accepted Answer

A)   the retailer charging more if a wealthy customer wants to buy something
B)   the retailer charging less if a price-sensitive customer comes in
C)   early-bird specials at a restaurant offering lower-priced meals before 6 pm
D)   automobile and antiques dealers haggling with customers
E)   None of these are examples of second-degree price discriminationF) A) and D)
G) None of the above

Question 14

What is the difference between price bundling and multiple-unit pricing?

Accepted Answer

Price bundling is the practice of offeri...

Question 15

Which of the following statements describes situations in which markdowns would be appropriate?

Accepted Answer

A)   Markdowns would be appropriate for national brand merchandise that were priced 15 percent lower in a neighbouring store
B)   Markdowns would be appropriate on a pair of pillows that had been part of a display and were showing light wear
C)   Markdowns would be appropriate for licensed merchandise supporting a movie that was not as popular as predicted
D)   Markdowns would be an appropriate pricing strategy for winter parkas that are still in stock in March
E)   All of these statementsF) B) and C)
G) A) and E)

Question 16

The owner of a tobacco shop has estimated net sales of $75,100 for next year, with her gross cost of goods sold equalling 35 percent of net sales. Her maintained markup percentage should be:

Accepted Answer

A)   75 percent
B)   65 percent
C)   150 percent
D)   11.85 percent
E)   Cannot be determined from the information givenF) B) and C)
G) B) and D)

Question 17

What was the initial reason for odd pricing?

Accepted Answer

A)   It offered a limited number of predetermined price points making pricing easier
B)   It saved on distribution costs
C)   It was used to increase traffic flow
D)   It reduced losses due to employee theft of cash
E)   It eliminated confusion when a customer shopped in different locationsF) B) and E)
G) C) and D)

Question 18

Which of the following best describes competition-oriented method of pricing?

Accepted Answer

A)   Prices are based upon adding a fixed percentage to the price of the product
B)   Prices are based upon what the merchandise is worth
C)   Prices are based upon manufacturer's suggestions
D)   Prices are double the cost of the merchandise
E)   Prices are based on competitor's pricesF) None of the above
G) B) and C)

Question 19

What is the benefit of having the Internet facilitate the use of an auction pricing mechanism like eBay?

Accepted Answer

A)   Sellers are able to communicate with the bidders.
B)   Sellers have more information.
C)   Potential buyers are able to see the products up close.
D)   Bidders are better able to follow previous bids.
E)   Participants no longer have to be in the same place for the auction.F) A) and E)
G) All of the above

Question 20

Left Wing is a small retailer which sells items for left-handed people. Since the store is located in a kiosk near one of the entrances to the subway system, it is often the target of shoplifters. It also experiences some merchandise damage in excess of what a store
Located in a more traditional setting would experience. These types of losses are called:

Accepted Answer

A)   net losses
B)   amortized losses
C)   loss margins
D)   markdowns
E)   reductionsF) B) and E)
G) A) and B)

Exam 12: Retail Pricing

Which of the following best describes competition-oriented method of pricing?

Correct Answer
verified

The competition-oriented method of setting retail prices is useful because it:

Correct Answer
verified

Correct Answer
verified

Why might a store that specializes in items for the kitchen markdown a line of dishtowels that depict scenes from current Disney movies?

Correct Answer
verified

What are the two reasons retailers take markdowns?

Correct Answer
verified
Retailers' reasons for taking ...
View Answer

Examples of second-degree price discrimination include:

Correct Answer
verified

What is the difference between price bundling and multiple-unit pricing?

Correct Answer
verified
Price bundling is the practice of offeri...
View Answer

What is a benefit of markdowns for a department store?

Correct Answer
verified

What is one way some customers initialize first-degree price discrimination?

Correct Answer
verified

Which of the following statements describes situations in which markdowns would be appropriate?

Correct Answer
verified

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

Correct Answer
verified
Retailers using a high/low pricing strat...
View Answer

A pricing experiment:

Correct Answer
verified

Which of the following is a benefit of price lining?

Correct Answer
verified

What was the initial reason for odd pricing?

Correct Answer
verified

As Jerome was leaving Ed's Electric, he noticed a bulletin board that featured small applications that he can send to the manufacturer with his receipt and receive a portion of what he spent on his digital TV back in the mail. What is this returned money called?

Correct Answer
verified

The owner of a tobacco shop has estimated net sales of $75,100 for next year, with her gross cost of goods sold equalling 35 percent of net sales. Her maintained markup percentage should be:

Correct Answer
verified

When making a good markdown decision, a retailer needs to:

Correct Answer
verified

As a means of creating a differential advantage, some retailers have responded to their customers' needs by creating formats that emphasize low prices. Which of the following would fall into these formats?

Correct Answer
verified

Jessica runs a neighbourhood produce stand in a downtown neighbourhood. With the recent layoffs, she has become popular because she gives her day-old produce to the local charity for struggling members of her community. Obviously, she takes a loss, but what is the benefit from this act of altruism?

Correct Answer
verified

What is the benefit of having the Internet facilitate the use of an auction pricing mechanism like eBay?

Correct Answer
verified

Exam 12: Retail Pricing

Which of the following best describes competition-oriented method of pricing?

Correct AnswerverifiedShow Answer

The competition-oriented method of setting retail prices is useful because it:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Why might a store that specializes in items for the kitchen markdown a line of dishtowels that depict scenes from current Disney movies?

Correct AnswerverifiedShow Answer

What are the two reasons retailers take markdowns?

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

Examples of second-degree price discrimination include:

Correct AnswerverifiedShow Answer

What is the difference between price bundling and multiple-unit pricing?

Correct AnswerverifiedPrice bundling is the practice of offeri...View AnswerShow Answer

What is a benefit of markdowns for a department store?

Correct AnswerverifiedShow Answer

What is one way some customers initialize first-degree price discrimination?

Correct AnswerverifiedShow Answer

Which of the following statements describes situations in which markdowns would be appropriate?

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

A pricing experiment:

Correct AnswerverifiedShow Answer

Which of the following is a benefit of price lining?

Correct AnswerverifiedShow Answer

What was the initial reason for odd pricing?

Correct AnswerverifiedShow Answer

As Jerome was leaving Ed's Electric, he noticed a bulletin board that featured small applications that he can send to the manufacturer with his receipt and receive a portion of what he spent on his digital TV back in the mail. What is this returned money called?

Correct AnswerverifiedShow Answer

The owner of a tobacco shop has estimated net sales of $75,100 for next year, with her gross cost of goods sold equalling 35 percent of net sales. Her maintained markup percentage should be:

Correct AnswerverifiedShow Answer

When making a good markdown decision, a retailer needs to:

Correct AnswerverifiedShow Answer

As a means of creating a differential advantage, some retailers have responded to their customers' needs by creating formats that emphasize low prices. Which of the following would fall into these formats?

Correct AnswerverifiedShow Answer

Jessica runs a neighbourhood produce stand in a downtown neighbourhood. With the recent layoffs, she has become popular because she gives her day-old produce to the local charity for struggling members of her community. Obviously, she takes a loss, but what is the benefit from this act of altruism?

Correct AnswerverifiedShow Answer

What is the benefit of having the Internet facilitate the use of an auction pricing mechanism like eBay?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Retailers' reasons for taking ...
View Answer

Correct Answer
verified

Correct Answer
verified
Price bundling is the practice of offeri...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Retailers using a high/low pricing strat...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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