If Sales Revenues Are Used in the Denominator in the Profitability

question 42

Multiple Choice

If sales revenues are used in the denominator in the profitability index for a product then:

• A)the company has no constraint.
• B)total sales should be the company's constraint.
• C)the selling price of the product in question is the company's constraint.
• D)selling effort should be the company's constraint.

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Definitions:

Multiple Level Selling

A marketing strategy that involves selling products through a network of distributors or representatives who earn income from both direct sales to customers and the sales of recruited team members.

Multibrand Strategy

A marketing strategy that involves selling multiple competing brands within a single company's portfolio.

Perceived Value

The value a consumer assigns to a product based on their personal assessment rather than its objective market value.

Cannibalization

Cannibalization occurs when a company's new product or service eats into the sales of one of its existing offerings, often unintentionally harming overall revenue.