You Are the Marketing Manager for a Multi-State Auto Dealership

question 196

Multiple Choice

You are the marketing manager for a multi-state auto dealership in the Midwest.It is that time of year when your fleet of autos goes through major model year changes.You are putting the final touches on your pricing strategy to facilitate getting your inventory of autos low enough to make room for the new models. ​
​What is the practical problem involved in using your current sales and commission data to make pricing decisions?What pricing strategy solution would best address that problem?

• A)Problem: You are committed to the idea of maximizing profits for last year's models. Solution: Increase the price of last year's models, emphasizing their future unavailability.
• B)Problem: You are committed to the idea of maximizing profits for next year's models. Solution: Keep the prices of last year's model the same, so that the new model's prices look more desirable.
• C)Problem: Your current sales and commission data are hard to quantify to formulate a pricing strategy. Solution: When a potential customer appears interested, formulate an individualized price for that person.
• D)Problem: Your commissions add to the cost of the cars, decreasing their attractiveness as bargains. Solution: Eliminate your commissions to reduce inventory.
• E) Problem: You have a clearer knowledge of the supply side of the pricing equation than you do of the demand side. Solution: Periodic discounting to keep pace with demand.

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Definitions:

Corrosive

A substance or chemical that can destroy or irreversibly damage another substance by contact.

Toxic

Harmful, poisonous, or potentially dangerous to organisms, often resulting from chemicals, substances, or environmental factors.

Killing Power

The effectiveness or capability of a substance or action to cause death.

Formaldehyde

A colorless, strong-smelling gas used in various manufacturing processes and as a preservative in medical laboratories.