Randy Todd, Marketing Manager for Sporting Products, Inc

question 221

Multiple Choice

Randy Todd, marketing manager for Sporting Products, Inc. (SPI) , is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast growing retail chain, Sports Depot, only uses a 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost-to draw customers into its stores and stimulate sales of its pricey basketball shoes.
Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all of its baseball gloves at $20, $40, or $60-with no prices in between. There are three big bins - one for each price point.
Todd is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls-plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless.
Todd is not certain if Sports Depot ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, if Sports Depot sells the racquet at a lower than normal price other retailers might decide to carry it.
Which of the following would NOT be one of SPI's fixed costs in the production of basketballs?

• A) rent on the building used to store inventory of balls.
• B) rubber used to make the balls.
• C) property taxes for the building used to make the balls.
• D) depreciation on the equipment used to make the balls.
• E) insurance on the building used to make the balls.

Understand the relationship between physical exercise and cognitive and physical health in late adulthood.

Comprehend the significance of telomeres in aging and the potential for brain plasticity.

Understand the research methods used in developmental psychology, including cross-sectional, longitudinal, and lifespan approaches.

Recognize the role of significant life events and social support networks in psychological development.

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Definitions:

Haptic Senses

Relating to the sense of touch, including the perception and manipulation of objects using the skin and body.

Psychophysics

A branch of psychology that deals with the relationships between physical stimuli and the sensory perceptions and mental responses they evoke.

Differential Theory

suggests individual differences in behavior, traits, and intelligence result from genetic variation or environmental factors.

Psychotherapeutics

The treatment of mental or emotional disorders through psychological methods rather than medical interventions.