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.

Question

Quizplus · Accepted Answer

The statement in option B actually describes a reason why a marketing manager might want to use this tactic, as it emphasizes understanding the cost structure and contribution to overhead, rather than avoiding it.

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