AMA PCM Exam Questions in PDF and Online - Page: 3

QUESTION: 11

What do retail outlets hope to achieve from using promotions in conjunction with markdowns?

Bulk purchase of products, which reduces brand switching and, in turn, increased consumption
Increased loyalty of customers based on discounts tailored to suit individual customers
An increase in store traffic that leads to the purchase of non-promotional products at regular prices
Increased savings for customers and increased profits, without actually cutting prices
Selling off less desirable products by including them in a package with more desirable products

Answer(s): C

Aaron Ulm and Edyth Mcgann are marketing analysts at Cara Cobey Fashion House, an online retailer that only sells private brands. Cara Cobey made a profit of $145, 000 the previous year and $180, 000 the year before. The loss in profit of almost 20% prompts Cara to hire Aaron and Edyth. Aaron and Edyth figure out that the drop in sales corresponds to a 15% drop in the number of visitors to the site. On their advice, Cara invests $10, 000 in revamping the website to enable potential customers find it easily using Internet searches. At the end of the year, Cara reports a profit of $175, 000. What is the ROI in this scenario?