Title: Explain the concept of markup/markdown and how it relates to profit and loss.
Course: Strategic Marketing (12152) > Section: Pricing Products and Services

Explanation should include

- the definition of markup and markdown
- the role and types of markup/markdown (e.g., cost method, retail method)
- the effects of different factors on markup/markdown
  - channels of distribution (e.g., Internet sales)
  - competition
  - fluctuation
  - economic factors
- comparison of the factors determining price on online purchases vs. retail purchases (overhead, shipping, taxes, security, returns).

Process/Skill Questions:

- Why does a marketer need to know how to compute markup even when software programs can calculate the figures?
- What can a company do to offer a low price at first, and then allow the price to rise later?
- Why do most retailers prefer the retail method of determining markup?
- What is the purpose of markup?
- How can promotional pricing be profitable?
- What is the role of coupons in profit and loss?