1.Go to the website of Sandals (www.sandals.com) and see what you can get for an all-inclusive price. Describe how bundling services and products provides vacationers with value. Find an example of price bundling outside the travel industry. Which method, bundling or nonbundling, do you believe provides the customer with the best value? Which makes the retailer or service provider more profits?

2.What types of retailers often use a high/low pricing strategy? What types of retailers generally use an everyday low-pricing strategy? How would customers likely react if a retailer switched its pricing strategy from one to the other? Explain your response.

3.A department store's maintained markup is 38 percent, reductions are $560, and net sales are $28,000. What's the initial markup percentage?

4.Answer the following questions: (a) J.Crew is planning a new line ofjackets for fall.It plans to sell the jackets for $100. It is having the jackets produced in the Dominican Republic.Although J. Crew does not own the factory, its product development and design costs are $400,000.The total cost of the jacket, including transportation to the stores, is $45.For this line to be successful, The Limited needs to make $900,000 profit.What is its break-even point in units and dollars? (b) The buyer has just found out that The Gap, one of J. Crew's major competitors, is bringing out a similar jacket that will retail for $90.If J. Crew wishes to match The Gap's price, how many units will it have to sell?

5.Maintained markup is 39 percent, net sales are $52,000, and reductions are $2,500. What are the gross margin in dollars and the initial markup as a percentage? Explain why initial markup is greater than maintained markup.