With a Looming Recession in Front of Him, Department Store

question 510

Multiple Choice

With a looming recession in front of him, department store owner Cooper Collins decided to make a gutsy move with his high-end Eastpointe stores. Rather than focus on the upscale, luxury market that the store attracted earlier in the decade, he focused on bringing in clothing with more mass appeal. The stores succeeded in turning around downward trending sales. In conjunction with your understanding of the product life cycle, which of the following statements summarizes the marketing strategy?

• A) Eastpointe recognized that it was not competing well with its traditional higher income market. It decided to change its product offering and price to appeal to a broader market and increase sales and profits.
• B) Eastpointe stores recognized several markets that it could reach with its upscale clothing lines.
• C) Eastpointe positioned itself against, rather than with, the competition. It decided to adhere to its price leadership position.
• D) Eastpointe knew that in order to re-invent itself, it was going to have to practice the same marketing strategy followed by Walmart and other discount stores. It would make all marketing decisions based on cost. The price on an item need only exceed what it cost to make and ship it. Falling prices became the norm.

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Definitions:

Income from Operations

Net earnings generated from a company's normal business operations, excluding revenues and expenses from non-operational activities.

Periodic Inventory System

An inventory system where updates to inventory levels are made on a periodic basis rather than continuously.

Cost of Goods Sold

Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Purchases

The total amount of goods and materials acquired by a business for the purpose of resale or production during a specific accounting period.