One Popular Cost-Oriented Pricing Tactic Is Culling Low-Profit Margin Products

question 60

Multiple Choice

One popular cost-oriented pricing tactic is culling low-profit margin products from the product line.Which of the following statements does NOT describe a reason why a marketing manager would want to avoid this tactic?

• A) The low margin item may be a large volume contributor to profit.
• B) The tactic focuses special attention on the costs of producing each line and their contribution to overhead.
• C) The loss of one item in the line may reduce the economies of scale.
• D) The rest of the product line image may suffer if there is a "hole" in the line.
• E) Other items in the line will now have to cover more fixed costs.

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Definitions:

Do-not-resuscitate Order

A medical order to withhold cardiopulmonary resuscitation (CPR) or advanced cardiac life support (ACLS) in the event of cardiac or respiratory arrest.

Airway Obstruction

A blockage in the breathing passages that can be partial or complete, posing a serious risk to the affected individual.

Cardiopulmonary Arrest

A medical emergency characterized by the cessation of both heart and lung function.

Cardiopulmonary Resuscitation

An emergency procedure combining chest compressions with artificial ventilation to manually preserve intact brain function in a person who is in cardiac arrest.