Question 1

_____ pricing occurs when the price of each unit as a multi-unit package is less than the price of each unit if it were sold individually.

Accepted Answer

A)  Bundle 
B)  One-price 
C)  Leader 
D)  Loss leader 
E)  Multiple-unit 
A)  Bundle 
B)  One-price 
C)  Leader 
D)  Loss leader 
E)  Multiple-unit

Question 2

Pricing a product at $49.98 instead of $50.00 is called:

Accepted Answer

A)  trading down. 
B)  price pointing. 
C)  odd pricing. 
D)  price lining. 
E)  even pricing. 
A)  trading down. 
B)  price pointing. 
C)  odd pricing. 
D)  price lining. 
E)  even pricing.

Question 3

A rule of thumb for markdowns is that prices should be marked down at least 20 percent in order for the consumer to notice.

Accepted Answer

A) True 
 B)False

Question 4

What type of errors can a retailer make that will later cause the retailer to take a markdown? Discuss the advantages and disadvantages of early and late markdown policies that would be used to remedy these errors.

Accepted Answer

The four basic errors a retailer can mak

Question 5

If a salesperson persuades a customer to purchase a higher-priced item than the customer initially intended,the salesperson has _____ the customer.

Accepted Answer

A)  flexed 
B)  tricked 
C)  traded up 
D)  baited 
E)  deceived 
A)  flexed 
B)  tricked 
C)  traded up 
D)  baited 
E)  deceived

Question 6

Markdowns taken early speed the movement of merchandise,and also generally enable the retailer to take less of a markdown per unit to dispose of the goods.

Accepted Answer

A) True 
 B)False

Question 7

Maintained markup is the actual selling price of an item minus its cost.

Accepted Answer

A) True 
 B)False

Question 8

McDonald's and Burger King are sometimes forced to drop prices by promoting "value meals" in the face of mounting competition.This is an example of a ______ objective.

Accepted Answer

A)  target 
B)  status quo 
C)  competitive 
D)  comparable 
E)  market share 
A)  target 
B)  status quo 
C)  competitive 
D)  comparable 
E)  market share

Question 9

Profitability is not directly related to the amount of gross margin per unit sold times the number of units sold.

Accepted Answer

A) True 
 B)False

Question 10

An item that is sold below a retailer's cost is known as a loss leader.

Accepted Answer

A) True 
 B)False

Question 11

Reductions in the price of an item that are taken in order to stimulate sales are termed:

Accepted Answer

A)  maintained price cuts. 
B)  promotional price cuts. 
C)  shortages. 
D)  markdowns. 
E)  initial price cuts. 
A)  maintained price cuts. 
B)  promotional price cuts. 
C)  shortages. 
D)  markdowns. 
E)  initial price cuts.

Question 12

The practice of setting retail prices that end in the digits 5,8 or 9 is called odd pricing.

Accepted Answer

A) True 
 B)False

Question 13

Markdown percentage is calculated by:

Accepted Answer

A)  dividing the amount of the reduction by the original selling price. 
B)  dividing the amount of the reduction by the original cost. 
C)  dividing the amount of the reduction by the price after the markdown. 
D)  dividing the amount of the reduction by difference between the cost and the original selling price. 
E)  dividing the amount of the reduction by the net sales. 
A)  dividing the amount of the reduction by the original selling price. 
B)  dividing the amount of the reduction by the original cost. 
C)  dividing the amount of the reduction by the price after the markdown. 
D)  dividing the amount of the reduction by difference between the cost and the original selling price. 
E)  dividing the amount of the reduction by the net sales.

Question 14

An item that a buyer sees as being a risky purchase would be likely to have a higher-than-normal markup percentage.

Accepted Answer

A) True 
 B)False

Question 15

A _____ pricing strategy involves the use of high everyday prices and low leader "specials" on featured items in a retailer's weekly ads.

Accepted Answer

A)  flexible 
B)  leader 
C)  competitive 
D)  variable 
E)  high-low 
A)  flexible 
B)  leader 
C)  competitive 
D)  variable 
E)  high-low

Question 16

Maintained markup percentage equals:

Accepted Answer

A)  initial markup percentage - [(reduction percentage)(100 percent - initial markup percentage)]. 
B)  (original retail price - cost)/original retail price. 
C)  initial markup percentage + [(reduction percentage)(100 percent - initial markup percentage]. 
D)  (gross margin + alteration costs + reductions) / (net sales + reductions). 
E)  (percentage markup on selling price) / (100 percent - percentage markup on selling price). 
A)  initial markup percentage - [(reduction percentage)(100 percent - initial markup percentage)]. 
B)  (original retail price - cost)/original retail price. 
C)  initial markup percentage + [(reduction percentage)(100 percent - initial markup percentage]. 
D)  (gross margin + alteration costs + reductions) / (net sales + reductions). 
E)  (percentage markup on selling price) / (100 percent - percentage markup on selling price).

Question 17

A landlord charges the same apartment rent as last year,but now adds a fee for parking spaces.This practice is known as:

Accepted Answer

A)  entrapment. 
B)  unbundling. 
C)  bait-and-switch pricing. 
D)  bundling. 
E)  high-low pricing. 
A)  entrapment. 
B)  unbundling. 
C)  bait-and-switch pricing. 
D)  bundling. 
E)  high-low pricing.

Question 18

When a retailer increases the number of customers coming into its store by advertising a widely known and frequently purchased product below cost,it is following a _____ strategy.

Accepted Answer

A)  promotional pricing 
B)  unit pricing 
C)  loss-leader pricing 
D)  leader pricing 
E)  below-market pricing 
A)  promotional pricing 
B)  unit pricing 
C)  loss-leader pricing 
D)  leader pricing 
E)  below-market pricing

Question 19

A(n)_____ policy should be adopted when the retailer wants to avoid disrupting the sale of regular merchandise by marking down goods too frequently.

Accepted Answer

A)  early 
B)  late 
C)  negative 
D)  flexible 
E)  steady 
A)  early 
B)  late 
C)  negative 
D)  flexible 
E)  steady

Question 20

As goods are sold through more retail outlets,their markup percentage should decrease.

Accepted Answer

A) True 
 B)False

_____ pricing occurs when the price of each unit as a multi-unit package is less than the price of each unit if it were sold individually.

Pricing a product at $49.98 instead of $50.00 is called:

A rule of thumb for markdowns is that prices should be marked down at least 20 percent in order for the consumer to notice.

What type of errors can a retailer make that will later cause the retailer to take a markdown? Discuss the advantages and disadvantages of early and late markdown policies that would be used to remedy these errors.

If a salesperson persuades a customer to purchase a higher-priced item than the customer initially intended,the salesperson has _____ the customer.

Markdowns taken early speed the movement of merchandise,and also generally enable the retailer to take less of a markdown per unit to dispose of the goods.

Maintained markup is the actual selling price of an item minus its cost.

McDonald's and Burger King are sometimes forced to drop prices by promoting "value meals" in the face of mounting competition.This is an example of a ______ objective.

Profitability is not directly related to the amount of gross margin per unit sold times the number of units sold.

An item that is sold below a retailer's cost is known as a loss leader.

Reductions in the price of an item that are taken in order to stimulate sales are termed:

The practice of setting retail prices that end in the digits 5,8 or 9 is called odd pricing.

Markdown percentage is calculated by:

An item that a buyer sees as being a risky purchase would be likely to have a higher-than-normal markup percentage.

A _____ pricing strategy involves the use of high everyday prices and low leader "specials" on featured items in a retailer's weekly ads.

Maintained markup percentage equals:

A landlord charges the same apartment rent as last year,but now adds a fee for parking spaces.This practice is known as:

When a retailer increases the number of customers coming into its store by advertising a widely known and frequently purchased product below cost,it is following a _____ strategy.

A(n)_____ policy should be adopted when the retailer wants to avoid disrupting the sale of regular merchandise by marking down goods too frequently.

As goods are sold through more retail outlets,their markup percentage should decrease.

Perspectives on Retailing

Retail Strategic Planning and Operations Management

Retail Customers

Evaluating the Competition in Retailing

Managing the Supply Chain

Legal and Ethical Behavior

Market Selection and Retail Location Analysis

Managing a Retailer’s Finances

Merchandise Buying and Handling

Advertising and Promotion

Customer Service and Retail Selling

Store Layout and Design

Managing People

Filters

Exam 10: Merchandise Pricing

_____ pricing occurs when the price of each unit as a multi-unit package is less than the price of each unit if it were sold individually.

Pricing a product at $49.98 instead of $50.00 is called:

A rule of thumb for markdowns is that prices should be marked down at least 20 percent in order for the consumer to notice.

What type of errors can a retailer make that will later cause the retailer to take a markdown? Discuss the advantages and disadvantages of early and late markdown policies that would be used to remedy these errors.

If a salesperson persuades a customer to purchase a higher-priced item than the customer initially intended,the salesperson has _____ the customer.

Markdowns taken early speed the movement of merchandise,and also generally enable the retailer to take less of a markdown per unit to dispose of the goods.

Maintained markup is the actual selling price of an item minus its cost.

McDonald's and Burger King are sometimes forced to drop prices by promoting "value meals" in the face of mounting competition.This is an example of a ______ objective.

Profitability is not directly related to the amount of gross margin per unit sold times the number of units sold.

An item that is sold below a retailer's cost is known as a loss leader.

Reductions in the price of an item that are taken in order to stimulate sales are termed:

The practice of setting retail prices that end in the digits 5,8 or 9 is called odd pricing.

Markdown percentage is calculated by:

An item that a buyer sees as being a risky purchase would be likely to have a higher-than-normal markup percentage.

A _____ pricing strategy involves the use of high everyday prices and low leader "specials" on featured items in a retailer's weekly ads.

Maintained markup percentage equals:

A landlord charges the same apartment rent as last year,but now adds a fee for parking spaces.This practice is known as:

When a retailer increases the number of customers coming into its store by advertising a widely known and frequently purchased product below cost,it is following a _____ strategy.

A(n)_____ policy should be adopted when the retailer wants to avoid disrupting the sale of regular merchandise by marking down goods too frequently.

As goods are sold through more retail outlets,their markup percentage should decrease.

Perspectives on Retailing

Retail Strategic Planning and Operations Management

Retail Customers

Evaluating the Competition in Retailing

Managing the Supply Chain

Legal and Ethical Behavior

Market Selection and Retail Location Analysis

Managing a Retailer’s Finances

Merchandise Buying and Handling

Advertising and Promotion

Customer Service and Retail Selling

Store Layout and Design

Managing People

Filters