Question 1

_____ is a pricing objective that seeks to obtain as much profit as possible.

Accepted Answer

A)  Profit maximization 
B)  Target-return 
C)  Percentage-of-sales 
D)  Competition-oriented 
E)  Skimming 
A)  Profit maximization 
B)  Target-return 
C)  Percentage-of-sales 
D)  Competition-oriented 
E)  Skimming

Question 2

Which of the following conditions does NOT allow a retailer to price above the market?

Accepted Answer

A)  Offering an exclusive merchandise line 
B)  Maintaining extended hours of operation 
C)  Having a competitor with similar merchandise lines located next door 
D)  Having outlets in accessible and convenient locations 
E)  Providing "extra" services 
A)  Offering an exclusive merchandise line 
B)  Maintaining extended hours of operation 
C)  Having a competitor with similar merchandise lines located next door 
D)  Having outlets in accessible and convenient locations 
E)  Providing "extra" services

Question 3

A _____ is least apt to use an above-market pricing policy.

Accepted Answer

A)  small neighborhood drugstore 
B)  top-of-line apparel retailer, such as Neiman Marcus 
C)  mom-and-pop grocery store 
D)  warehouse club 
E)  fast-food restaurant located on a turnpike 
A)  small neighborhood drugstore 
B)  top-of-line apparel retailer, such as Neiman Marcus 
C)  mom-and-pop grocery store 
D)  warehouse club 
E)  fast-food restaurant located on a turnpike

Question 4

One of the cues a customer uses in determining a retailer's image is the retailer's prices.

Accepted Answer

A) True 
 B)False

Question 5

What general rules should a retailer know when planning initial markups? Explain why retailers generally express markups as a percentage of selling price.

Accepted Answer

In planning initial markups,some of the

Question 6

An advantage of a(n)_____ markdown policy is that it allows the retailer to replenish lower-priced lines from the higher priced lines that have been marked down.

Accepted Answer

A)  low 
B)  early 
C)  segmented 
D)  late 
E)  flexible 
A)  low 
B)  early 
C)  segmented 
D)  late 
E)  flexible

Question 7

A small neighborhood drugstore is probably forced to use above-the-market pricing because of their low cost structure and high sales volume.

Accepted Answer

A) True 
 B)False

Question 8

An example of a retailer using customary pricing would be:

Accepted Answer

A)  a local barber shop maintaining the price of a haircut at $9.00. 
B)  a local hardware store promising to undersell the competition by at least 1 percent. 
C)  Wal-Mart promising to always have the lowest prices in town. 
D)  setting a price at $4.99 instead of $5.00. 
E)  charging different consumers different prices. 
A)  a local barber shop maintaining the price of a haircut at $9.00. 
B)  a local hardware store promising to undersell the competition by at least 1 percent. 
C)  Wal-Mart promising to always have the lowest prices in town. 
D)  setting a price at $4.99 instead of $5.00. 
E)  charging different consumers different prices.

Question 9

As a rule,retailers that offer greater levels of customer service tend to have lower prices.

Accepted Answer

A) True 
 B)False

Question 10

Clerical error probably accounts for more stock shortages than theft.

Accepted Answer

A) True 
 B)False

Question 11

Why is price lining used by some retailers?

Accepted Answer

To simplify pricing procedures and help

Question 12

The rules of action or guidelines that ensure uniformity of pricing decisions within a retail operation are know as the retailer's pricing:

Accepted Answer

A)  tactics. 
B)  rules. 
C)  policies. 
D)  strategies. 
E)  objectives. 
A)  tactics. 
B)  rules. 
C)  policies. 
D)  strategies. 
E)  objectives.

Question 13

Employee and customer discounts are some of the reasons for the difference between initial and maintained markup.

Accepted Answer

A) True 
 B)False

Question 14

A local retailer offers T-shirts at three price levels.Consumers can pay $6.99,$14.99,or $27.99 for the shirts.This pricing strategy is called price lining.

Accepted Answer

A) True 
 B)False

Question 15

Given the following information,what initial markup percentage should be planned if net sales are expected to be $500,000?
$\begin{array} { ll  } 
 \text { Operating expenses}&\$120,000\
 \text { Net profit goal}&\$30,000\
 \text {Planned reductions for markdowns }&\$320,000\
 \text { Planned reductions for theft/shortage/discount}&\$8,000\
 \text { Alteration costs}&\$10,000\
 \text {Cash discounts received by the retailer }&\$5,000\
\end{array}$

Accepted Answer

A)  28 percent 
B)  36 percent 
C)  30 percent 
D)  39 percent 
E)  45 percent 
A)  28 percent 
B)  36 percent 
C)  30 percent 
D)  39 percent 
E)  45 percent

Question 16

_____ pricing is used when differences in demand and cost force the retailer to change prices in a fairly predictable manner.

Accepted Answer

A)  Unbundled 
B)  Uncustomary 
C)  Variable 
D)  Flexible 
E)  Leader 
A)  Unbundled 
B)  Uncustomary 
C)  Variable 
D)  Flexible 
E)  Leader

Question 17

If the percentage markup on cost is 50 percent,what is the percentage markup on selling price?

Accepted Answer

A)  140 percent 
B)  100 percent 
C)  28.5 percent 
D)  33.3 percent 
E)  50 percent 
A)  140 percent 
B)  100 percent 
C)  28.5 percent 
D)  33.3 percent 
E)  50 percent

Question 18

A retailer's markdown percentage is the amount of the reduction divided by the original selling price.

Accepted Answer

A) True 
 B)False

Question 19

Reductions cause the difference between a retailer's maintained markup and initial markup.

Accepted Answer

A) True 
 B)False

Question 20

Given the following information,what is the initial markup percentage? Planned sales = $180,000; planned expenses = $48,000; planned profit = $12,000 and planned reductions = $4,000.

Accepted Answer

A)  33 percent 
B)  39 percent 
C)  35 percent 
D)  37 percent 
E)  40 percent 
A)  33 percent 
B)  39 percent 
C)  35 percent 
D)  37 percent 
E)  40 percent

_____ is a pricing objective that seeks to obtain as much profit as possible.

Which of the following conditions does NOT allow a retailer to price above the market?

A _____ is least apt to use an above-market pricing policy.

One of the cues a customer uses in determining a retailer's image is the retailer's prices.

What general rules should a retailer know when planning initial markups? Explain why retailers generally express markups as a percentage of selling price.

An advantage of a(n)_____ markdown policy is that it allows the retailer to replenish lower-priced lines from the higher priced lines that have been marked down.

A small neighborhood drugstore is probably forced to use above-the-market pricing because of their low cost structure and high sales volume.

An example of a retailer using customary pricing would be:

As a rule,retailers that offer greater levels of customer service tend to have lower prices.

Clerical error probably accounts for more stock shortages than theft.

Why is price lining used by some retailers?

The rules of action or guidelines that ensure uniformity of pricing decisions within a retail operation are know as the retailer's pricing:

Employee and customer discounts are some of the reasons for the difference between initial and maintained markup.

A local retailer offers T-shirts at three price levels.Consumers can pay $6.99,$14.99,or $27.99 for the shirts.This pricing strategy is called price lining.

_____ pricing is used when differences in demand and cost force the retailer to change prices in a fairly predictable manner.

If the percentage markup on cost is 50 percent,what is the percentage markup on selling price?

A retailer's markdown percentage is the amount of the reduction divided by the original selling price.

Reductions cause the difference between a retailer's maintained markup and initial markup.

Given the following information,what is the initial markup percentage? Planned sales = $180,000; planned expenses = $48,000; planned profit = $12,000 and planned reductions = $4,000.

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

_____ is a pricing objective that seeks to obtain as much profit as possible.

Which of the following conditions does NOT allow a retailer to price above the market?

A _____ is least apt to use an above-market pricing policy.

One of the cues a customer uses in determining a retailer's image is the retailer's prices.

What general rules should a retailer know when planning initial markups? Explain why retailers generally express markups as a percentage of selling price.

An advantage of a(n)_____ markdown policy is that it allows the retailer to replenish lower-priced lines from the higher priced lines that have been marked down.

A small neighborhood drugstore is probably forced to use above-the-market pricing because of their low cost structure and high sales volume.

An example of a retailer using customary pricing would be:

As a rule,retailers that offer greater levels of customer service tend to have lower prices.

Clerical error probably accounts for more stock shortages than theft.

Why is price lining used by some retailers?

The rules of action or guidelines that ensure uniformity of pricing decisions within a retail operation are know as the retailer's pricing:

Employee and customer discounts are some of the reasons for the difference between initial and maintained markup.

A local retailer offers T-shirts at three price levels.Consumers can pay $6.99,$14.99,or $27.99 for the shirts.This pricing strategy is called price lining.

_____ pricing is used when differences in demand and cost force the retailer to change prices in a fairly predictable manner.

If the percentage markup on cost is 50 percent,what is the percentage markup on selling price?

A retailer's markdown percentage is the amount of the reduction divided by the original selling price.

Reductions cause the difference between a retailer's maintained markup and initial markup.

Given the following information,what is the initial markup percentage? Planned sales = $180,000; planned expenses = $48,000; planned profit = $12,000 and planned reductions = $4,000.

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