Which of the following statements is MOST ACCURATE?
A)Nonprofit organizations are exempt from having to cover the costs of producing and/or marketing their products.
B)Socially responsible corporations should have the pricing constraint of covering all costs of producing and marketing their products,but they should not price their products to earn a profit.
C)Marketers must ensure that firms in their channels of distribution must make an adequate profit or they will be cut off from their customers.
D)Price elasticity of demand makes it virtually impossible for companies to cover all their marketing and production costs at all times.
E)Marketing and production costs are the most difficult and expensive aspect of pricing because they draw so much capital away from other departments in the organization.

Question

Quizplus · Accepted Answer

Marketers must ensure that firms in their channels of distribution make an adequate profit, known as a fair return on investment (ROI), or they risk losing those firms as customers. This is important because channel members, such as retailers and wholesalers, provide essential functions such as inventory management, promotion, and customer service. If they are not making a reasonable profit, they may choose to stop carrying the product or switch to a competitor's product. Nonprofit organizations may be exempt from some taxes and regulations, but they still have to cover their costs and generate revenue to support their operations. Socially responsible corporations should strive to earn a profit while also fulfilling their obligations to society and minimizing negative impacts on the environment. Price elasticity of demand does pose challenges for firms trying to cover their costs with pricing, but it is not impossible. Finally, while marketing and production costs can be significant, pricing decisions should take into account all types of costs, including fixed and variable costs as well as opportunity costs.

Which of the Following Statements Is MOST ACCURATE