Question 1

A price experiment

Accepted Answer

A)  is a method of determining the most profitable price for a product. 
B)  cannot be performed if the retailer uses POS terminals. 
C)  is a less accurate method of determining buyer response to price changes than a consumer panel. 
D)  is useful for obtaining data for a cost-oriented pricing strategy. 
E)  is a quick and efficient method to decide on a price for a product. 
A)  is a method of determining the most profitable price for a product. 
B)  cannot be performed if the retailer uses POS terminals. 
C)  is a less accurate method of determining buyer response to price changes than a consumer panel. 
D)  is useful for obtaining data for a cost-oriented pricing strategy. 
E)  is a quick and efficient method to decide on a price for a product.

Question 2

Why do vendors encourage retailers to sell at MSRP?

Accepted Answer

A)  To secure a profit 
B)  To reduce retail price competition among retailers 
C)  To avoid markdowns 
D)  To promote national brands as quality brands 
E)  To drive competitive retailers out of business 
A)  To secure a profit 
B)  To reduce retail price competition among retailers 
C)  To avoid markdowns 
D)  To promote national brands as quality brands 
E)  To drive competitive retailers out of business

Question 3

The merchandise cost from the vendor for an MP3 player is $82.50, and the retailer who is selling the device wants to use an initial markup percentage of 67 percent. Calculate the initial retail price.

Accepted Answer

A)  $149.50 
B)  $272 
C)  $55 
D)  $123 
E)  $250 
A)  $149.50 
B)  $272 
C)  $55 
D)  $123 
E)  $250

Question 4

Giant, a retail store, is offering two 6-packs of beer for $14.50. The price for a single 6-pack is $8.69. What pricing strategy is Giant using?

Accepted Answer

A)  Price lining 
B)  Multiple-unit pricing 
C)  Psychological pricing 
D)  Price bundling 
E)  Conjoint pricing 
A)  Price lining 
B)  Multiple-unit pricing 
C)  Psychological pricing 
D)  Price bundling 
E)  Conjoint pricing

Question 5

Generally, as the price of a product increases, sales for the product will increase.

Accepted Answer

A) True 
 B)False

Question 6

Describe the difference between initial markup and maintained markup.

Accepted Answer

The initial markup is the retail selling

Question 7

Markdown money is funds a vendor gives the retailer to cover lost gross margin dollars that result from markdowns and other merchandising issues.

Accepted Answer

A) True 
 B)False

Question 8

Why was odd pricing used in the early twentieth century?

Accepted Answer

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

Question 9

________ is the practice of pricing certain items lower than normal to increase customers' traffic flow or boost sales of complementary products.

Accepted Answer

A)  Stimulus pricing 
B)  Leader pricing 
C)  Follow-up pricing 
D)  Price lining 
E)  Odd pricing 
A)  Stimulus pricing 
B)  Leader pricing 
C)  Follow-up pricing 
D)  Price lining 
E)  Odd pricing

Question 10

Which of the following items has the most price elasticity?

Accepted Answer

A)  Fast food 
B)  Branded luxury goods 
C)  Prescription medication 
D)  Movie tickets 
E)  Gasoline 
A)  Fast food 
B)  Branded luxury goods 
C)  Prescription medication 
D)  Movie tickets 
E)  Gasoline

Question 11

Mattie owns a clock shop featuring vintage clocks from the 1950s. Mattie plans to achieve a 40% maintained markup, and her reductions are planned at 4%. What is her planned initial markup percentage?

Accepted Answer

A)  42.3% 
B)  44% 
C)  36% 
D)  34.6% 
E)  30.6% 
A)  42.3% 
B)  44% 
C)  36% 
D)  34.6% 
E)  30.6%

Question 12

A ________ is a promise to customers to sell currently out-of-stock merchandise at the advertised price when it arrives.

Accepted Answer

A)  rain check 
B)  price audit 
C)  bona fide reference price 
D)  maintained markup 
E)  dynamic pricing policy 
A)  rain check 
B)  price audit 
C)  bona fide reference price 
D)  maintained markup 
E)  dynamic pricing policy

Question 13

Which of the following is not a benefit typically ascribed to an everyday low-pricing (EDLP) strategy?

Accepted Answer

A)  Increased profit margin 
B)  Improved customer loyalty 
C)  Improved inventory management 
D)  Increased sale advertising 
E)  Stockout reduction 
A)  Increased profit margin 
B)  Improved customer loyalty 
C)  Improved inventory management 
D)  Increased sale advertising 
E)  Stockout reduction

Question 14

________ are customers who go from one store to another, buying only items that are on special.

Accepted Answer

A)  Innovators 
B)  Laggards 
C)  Cherry pickers 
D)  Whistleblowers 
E)  Early adapters 
A)  Innovators 
B)  Laggards 
C)  Cherry pickers 
D)  Whistleblowers 
E)  Early adapters

Question 15

How can working with vendors reduce the number of markdowns?

Accepted Answer

Vendors have a partnering relationship w

Question 16

Dream Homes is an appliance store. It recently launched its own brand of freezers in order to build customer loyalty. The store launched three different models to cater to low-, middle-, and high-income groups. The freezers are also priced accordingly. These freezers are exclusive to Dream Homes and cater to all customer segments. This pricing strategy involving price points within a merchandise category is known as

Accepted Answer

A)  price lining. 
B)  price bundling. 
C)  odd pricing, 
D)  zone pricing. 
E)  leader pricing. 
A)  price lining. 
B)  price bundling. 
C)  odd pricing, 
D)  zone pricing. 
E)  leader pricing.

Question 17

Price elasticity is the percentage change in quantity sold divided by the percentage change in price.

Accepted Answer

A) True 
 B)False

Question 18

The break-even point quantity is the quantity at which total revenue equals total cost, beyond which profit occurs.

Accepted Answer

A) True 
 B)False

Question 19

The high/low pricing strategy helps sell slow-moving merchandise.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is the least profitable method of liquidating markdown merchandise?

Accepted Answer

A)  Sell the merchandise to another retailer. 
B)  Consolidate the unsold merchandise. 
C)  Place the remaining merchandise on an Internet auction site. 
D)  Give the merchandise to charity. 
E)  Carry the merchandise over to the next season. 
A)  Sell the merchandise to another retailer. 
B)  Consolidate the unsold merchandise. 
C)  Place the remaining merchandise on an Internet auction site. 
D)  Give the merchandise to charity. 
E)  Carry the merchandise over to the next season.

A price experiment

Why do vendors encourage retailers to sell at MSRP?

The merchandise cost from the vendor for an MP3 player is $82.50, and the retailer who is selling the device wants to use an initial markup percentage of 67 percent. Calculate the initial retail price.

Giant, a retail store, is offering two 6-packs of beer for $14.50. The price for a single 6-pack is $8.69. What pricing strategy is Giant using?

Generally, as the price of a product increases, sales for the product will increase.

Describe the difference between initial markup and maintained markup.

Markdown money is funds a vendor gives the retailer to cover lost gross margin dollars that result from markdowns and other merchandising issues.

Why was odd pricing used in the early twentieth century?

________ is the practice of pricing certain items lower than normal to increase customers' traffic flow or boost sales of complementary products.

Which of the following items has the most price elasticity?

Mattie owns a clock shop featuring vintage clocks from the 1950s. Mattie plans to achieve a 40% maintained markup, and her reductions are planned at 4%. What is her planned initial markup percentage?

A ________ is a promise to customers to sell currently out-of-stock merchandise at the advertised price when it arrives.

Which of the following is not a benefit typically ascribed to an everyday low-pricing (EDLP) strategy?

________ are customers who go from one store to another, buying only items that are on special.

How can working with vendors reduce the number of markdowns?

Price elasticity is the percentage change in quantity sold divided by the percentage change in price.

The break-even point quantity is the quantity at which total revenue equals total cost, beyond which profit occurs.

The high/low pricing strategy helps sell slow-moving merchandise.

Which of the following is the least profitable method of liquidating markdown merchandise?

Introduction to the World of Retailing

Types of Retailers

Multichannel and Omnichannel Retailing

Customer Buying Behavior

Retail Market Strategy

Financial Strategy

Retail Locations

Retail Site Location

Information Systems and Supply Chain Management

Customer Relationship Management

Managing the Merchandise Planning Process

Buying Merchandise

Retail Communication Mix

Human Resources and Managing the Store

Store Layout, Design, and Visual Merchandising

Customer Service

Filters

Exam 13: Retail Pricing

A price experiment

Why do vendors encourage retailers to sell at MSRP?

The merchandise cost from the vendor for an MP3 player is $82.50, and the retailer who is selling the device wants to use an initial markup percentage of 67 percent. Calculate the initial retail price.

Giant, a retail store, is offering two 6-packs of beer for $14.50. The price for a single 6-pack is $8.69. What pricing strategy is Giant using?

Generally, as the price of a product increases, sales for the product will increase.

Describe the difference between initial markup and maintained markup.

Markdown money is funds a vendor gives the retailer to cover lost gross margin dollars that result from markdowns and other merchandising issues.

Why was odd pricing used in the early twentieth century?

________ is the practice of pricing certain items lower than normal to increase customers' traffic flow or boost sales of complementary products.

Which of the following items has the most price elasticity?

Mattie owns a clock shop featuring vintage clocks from the 1950s. Mattie plans to achieve a 40% maintained markup, and her reductions are planned at 4%. What is her planned initial markup percentage?

A ________ is a promise to customers to sell currently out-of-stock merchandise at the advertised price when it arrives.

Which of the following is not a benefit typically ascribed to an everyday low-pricing (EDLP) strategy?

________ are customers who go from one store to another, buying only items that are on special.

How can working with vendors reduce the number of markdowns?

Price elasticity is the percentage change in quantity sold divided by the percentage change in price.

The break-even point quantity is the quantity at which total revenue equals total cost, beyond which profit occurs.

The high/low pricing strategy helps sell slow-moving merchandise.

Which of the following is the least profitable method of liquidating markdown merchandise?

Introduction to the World of Retailing

Types of Retailers

Multichannel and Omnichannel Retailing

Customer Buying Behavior

Retail Market Strategy

Financial Strategy

Retail Locations

Retail Site Location

Information Systems and Supply Chain Management

Customer Relationship Management

Managing the Merchandise Planning Process

Buying Merchandise

Retail Communication Mix

Human Resources and Managing the Store

Store Layout, Design, and Visual Merchandising

Customer Service

Filters