Innovators at 3M Developed Scotch-Brite^® Never Rust Wool Soap Pads

question 107

Multiple Choice

Innovators at 3M developed Scotch-Brite^® Never Rust Wool Soap Pads from recycled plastic bottles.Even though these soap pads are more expensive than competitive brands (Brillo and SOS) ,customers are willing to pay the premium price.Customers appreciate the value of a superior product (they don't rust or scratch) and appreciate the fact that their purchase is environmentally responsible.This demonstrates that

• A)an organization can be environmentally conscious while still satisfying its customers and remaining competitive in the market.
• B)an organization can use a customer's sense of social responsibility to its own advantage even though the effects are minimal.
• C)if a company uses recycled materials,it can always charge more than what a product is actually worth.
• D)it is more important to act in a socially responsible manner than to consider the profits and goals of the organization.
• E)the first brand that creates a new product gets to charge the highest price and make the greatest profits.

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Definitions:

Product Cost Concept

A concept used in applying the cost-plus approach to product pricing in which only the costs of manufacturing the product, termed the product cost, are included in the cost amount to which the markup is added.

Manufacturing Costs

Manufacturing costs encompass all expenses directly involved in the production of goods, including materials, labor, and overhead.

Markup

The difference between the cost of a product and its selling price, expressed as a percentage over cost.

Fixed Expenses

Regular and unchanged expenses incurred by a business irrespective of its level of output or sales volume, such as lease payments, insurance, and salaries of permanent employees.