The Marketing Manager of Icruise

question 4

Multiple Choice

The marketing manager of icruise.com (a Web site travel site targeted to consumers who want a luxury vacation) finds that the firm can gain market share and become the industry leader if it slashes prices by 50 percent during the month of December.However,the vice-president of finance is committed to reporting a 25 percent return on investment at all times.This conflict illustrates:

• A) a need to eliminate low-profit products
• B) a lack of corporate concentration on the marketing concept
• C) how pricing operates in a mature marketplace
• D) the need for trade-offs in pricing objectives
• E) how target markets can be ignored

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Definitions:

Double-declining-balance Method

A method of accelerated depreciation which doubles the straight-line depreciation rate, applying it against the un-depreciated balance each year.

Depreciation Schedule

A table detailing the periodic depreciation expense for an asset over its useful life.

Annual Depreciation

The process of allocating the cost of a tangible asset over its useful life on a yearly basis.

Useful Service Life

The estimated period over which a fixed asset is expected to be usable by the company.