Retail Management Final Exam Powell
Questions and Answers5
additional markup percentage - ANSWERS -looks at total dollar additional markups as a
percentage of net sales
addition to retail percentage - ANSWERS -measures a price rise as a percentage of the original
price
Price elasticity of demand - ANSWERS -the sensitivity of customers to price changes in terms of
the quantities they will buy
Horizontal price fixing - ANSWERS -an agreement among manufacturers, among wholesalers, or
among retailers to set prices
Vertical price fixing - ANSWERS -when manufacturers or wholesalers seek to control the retail
prices of their goods and services
Robinson-Patman Act - ANSWERS -Bars manufacturers and wholesalers from discriminating in
price or purchase terms in selling to individual retailers if these retailers are purchasing products
of "like quality" and the effect of such discrimination is to injure competition.
Minimum-price laws - ANSWERS -prevent retailers from selling certain items for less than their
cost plus a fixed percentage to cover overhead
Predatory pricing - ANSWERS -large retailers seek to reduce competition by selling goods and
services at very low prices, thus causing small retail to go out of business
, Loss Leaders - ANSWERS -Retailers price selected items below cost to lure more customer traffic
to their stores
Unit-pricing laws - ANSWERS -whereby some retailers must express both the total price of an
item and its price per unit of measure
Item price removal - ANSWERS -whereby prices are marked only on shelves or signs and not on
individual items
Bait-and-switch advertising - ANSWERS -an illegal practice in which a retailer lures a customer
by advertising goods and services at exceptionally low prices
Gray-market goods - ANSWERS -brand-named products bought in foreign markets or goods
transshipped from other retailers
Market penetration pricing - ANSWERS -used when a retailer seeks large revenues by setting
low prices and selling many units
Market skimming pricing - ANSWERS -a firm sets premium prices and attracts customers less
concerned with price than service, assortment, and prestige
Demand-oriented pricing - ANSWERS -retailer sets prices based on consumer desires
Cost-oriented pricing - ANSWERS -a retailer sets a price floor, the minimum price acceptable to
the firm so it can reach a specified profit goal
Competition-oriented pricing - ANSWERS -a retailer sets its prices in accordance with
competitors.
Questions and Answers5
additional markup percentage - ANSWERS -looks at total dollar additional markups as a
percentage of net sales
addition to retail percentage - ANSWERS -measures a price rise as a percentage of the original
price
Price elasticity of demand - ANSWERS -the sensitivity of customers to price changes in terms of
the quantities they will buy
Horizontal price fixing - ANSWERS -an agreement among manufacturers, among wholesalers, or
among retailers to set prices
Vertical price fixing - ANSWERS -when manufacturers or wholesalers seek to control the retail
prices of their goods and services
Robinson-Patman Act - ANSWERS -Bars manufacturers and wholesalers from discriminating in
price or purchase terms in selling to individual retailers if these retailers are purchasing products
of "like quality" and the effect of such discrimination is to injure competition.
Minimum-price laws - ANSWERS -prevent retailers from selling certain items for less than their
cost plus a fixed percentage to cover overhead
Predatory pricing - ANSWERS -large retailers seek to reduce competition by selling goods and
services at very low prices, thus causing small retail to go out of business
, Loss Leaders - ANSWERS -Retailers price selected items below cost to lure more customer traffic
to their stores
Unit-pricing laws - ANSWERS -whereby some retailers must express both the total price of an
item and its price per unit of measure
Item price removal - ANSWERS -whereby prices are marked only on shelves or signs and not on
individual items
Bait-and-switch advertising - ANSWERS -an illegal practice in which a retailer lures a customer
by advertising goods and services at exceptionally low prices
Gray-market goods - ANSWERS -brand-named products bought in foreign markets or goods
transshipped from other retailers
Market penetration pricing - ANSWERS -used when a retailer seeks large revenues by setting
low prices and selling many units
Market skimming pricing - ANSWERS -a firm sets premium prices and attracts customers less
concerned with price than service, assortment, and prestige
Demand-oriented pricing - ANSWERS -retailer sets prices based on consumer desires
Cost-oriented pricing - ANSWERS -a retailer sets a price floor, the minimum price acceptable to
the firm so it can reach a specified profit goal
Competition-oriented pricing - ANSWERS -a retailer sets its prices in accordance with
competitors.
