| Course | MT102 Principles of Retailing |
|---|---|
| Unit | Unit 5 |
| Paper type | Pricing exercise |
| Length | About 860 words, 6 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for MT102 Unit 5
What a Buy-One-Get-One Cartridge Deal Really Gives Away: A Unit 5 Pricing Exercise
[Student Name]
Purdue University Global
MT102: Principles of Retailing
Unit 5 Pricing Exercise
[Instructor Name]
[Date]
Glassmere Aquatics, its costs, prices and volumes are composite and illustrative; the sources cited are real.
The Scenario
Glassmere Aquatics sells its own-label 40-gallon hang-on-back filter, which costs the chain $18.00 a unit from its supplier, and a matching three-pack of replacement cartridges, which costs $4.20. The merchandising team has proposed a buy-one-get-one-free offer on cartridges for one month. In a normal month the chain sells about 1,000 cartridge packs across its fourteen stores.
Initial Markup on the Filter
The filter's planned retail price is $34.99, chosen as a price point just under $35, where Glassmere's research suggests hobbyists compare filters with the pet superstores.
The dollar markup is the retail price minus the cost: $34.99 minus $18.00 equals $16.99.
Markup as a percentage of cost divides the dollar markup by the cost. Dividing $16.99 by $18.00 gives 94.4 percent.
Markup as a percentage of retail divides the same dollar markup by the retail price. Dividing $16.99 by $34.99 gives 48.6 percent.
The two percentages describe the same $16.99. The percentage on cost is larger because cost is the smaller base. Retailers usually plan on retail, because gross margin is reported as a share of sales (Levy et al., 2019), and a buyer who confuses the two can overstate margin badly.
A short example shows the danger. A buyer who wants a 48.6 percent margin and mistakenly applies 48.6 percent as a markup on cost would price the filter at $18.00 plus $8.75, or $26.75. The resulting margin on retail would be only 32.7 percent, and the chain would lose more than $8 of margin on every filter sold before anyone noticed the error.
Clearance Markdown
Glassmere's supplier is replacing the filter with a new model, so the remaining stock will be cleared. The clearance price is $24.99.
The markdown in dollars is $34.99 minus $24.99, which equals $10.00. As a percentage of the original price, $10.00 divided by $34.99 is 28.6 percent.
At $24.99 the margin per filter is $6.99, which is 28.0 percent of the clearance price. The chain still earns money on each unit, but less than half the dollar margin of a full-price sale. The markdown makes sense only because the model is being discontinued; holding the stock would tie up shelf space the new model needs.
The Cartridge Promotion
At the regular price of $9.99, each cartridge pack earns $5.79 in margin, which is 58.0 percent of the price. On 1,000 packs a month that produces $5,790 in margin.
Under buy-one-get-one-free, a shopper pays $9.99 for two packs. The effective price per pack is $4.995, or a 50 percent discount. The margin per pack falls to $4.995 minus $4.20, which equals $0.795. Each pair sold earns $1.59.
To hold margin dollars flat at $5,790, the chain must sell $5,790 divided by $0.795 packs, which is about 7,283 packs, or 3,642 transactions. That is a sales lift of about 628 percent over a normal month.
This assumes every pack sold would not have sold anyway. In practice, many buyers are regular customers who would have bought a pack at full price and now take two for the same money. Blattberg et al. (1995) note that much of the volume a temporary price cut produces comes from shoppers buying earlier or buying more for their pantry rather than from new consumption, which makes the true lift needed even larger.
An Alternative Offer
A buy-one-get-one-50-percent-off offer changes the arithmetic. A shopper pays $9.99 plus $4.995, or $14.985, for two packs. The effective price per pack is $7.49, a 25 percent discount. Margin per pack is $7.49 minus $4.20, which equals $3.29.
To hold margin at $5,790, the chain must sell $5,790 divided by $3.29, or about 1,760 packs. That is a lift of about 76 percent. A lift of that size is still demanding, but it is within the range a well-promoted category can sometimes reach, especially when the offer brings back lapsed customers.
Recommendation
The buy-one-get-one-free offer should not run. It needs a sales lift of more than six times a normal month, and cartridges are a repeat purchase whose buyers mostly come anyway. A buy-one-get-one-50-percent-off offer is the better choice if the team wants a cartridge promotion, ideally limited to the first week of the month when the circular reaches shoppers.
Hoch et al. (1994) found that deep promotions often raise volume without raising profit, and this exercise shows why on a small scale. The figure a manager should watch afterward is not units sold but margin dollars in the category during the promotion month and the month after, since a pantry-loading shopper buys less once the offer ends. The assumption most likely to break the recommendation is the baseline of 1,000 packs: if cartridge sales were already falling, a promotion that brings lapsed buyers back could be worth more than the arithmetic shows.
A free cartridge pack does not halve the margin; it takes away more than eighty percent of it.
References
Blattberg, R. C., Briesch, R., & Fox, E. J. (1995). How promotions work. Marketing Science, 14(3_supplement), G122-G132. https://doi.org/10.1287/mksc.14.3.G122
Hoch, S. J., Drèze, X., & Purk, M. E. (1994). EDLP, hi-lo, and margin arithmetic. Journal of Marketing, 58(4), 16-27. https://doi.org/10.1177/002224299405800402
Levy, M., Weitz, B. A., & Grewal, D. (2019). Retailing management (10th ed.). McGraw-Hill Education.
Reading the MT 102 Unit 5 instructions
The fifth unit hands you a pricing scenario and asks for markup, markdown and promotion calculations, followed by a recommendation. Restate every given figure first so the grader can check your inputs. Calculate markup both on cost and on retail, writing out each formula before the numbers, and explain why the two percentages differ. Work the markdown as its own block: original price, reduced price, dollars off, percentage off and the margin that remains. For the promotion, convert the offer into an effective price per unit, find the remaining margin, and calculate the sales lift needed to keep margin dollars flat. Interpret each block as you go rather than saving all comment for the end. Close with a recommendation on whether the promotion should run, at what depth, and which figure to watch afterward. Show all working, since rubrics usually award method separately.
How the MT 102 Unit 5 example is put together
The sample sets the scenario with a $18.00 filter cost, a $34.99 planned price, a $4.20 cartridge pack cost, a $9.99 cartridge price and a baseline of 1,000 packs a month. Markup is shown on both bases, followed by an example of the error a buyer makes when confusing them, which would underprice the filter by more than $8. The markdown block takes the filter to $24.99 for clearance and reports a 28.0 percent remaining margin. The promotion block shows margin per pack falling from $5.79 to $0.795 under the free offer, so 7,283 packs are needed to hold $5,790 in margin. Blattberg, Briesch and Fox explain why much promoted volume is pantry loading. An alternative half-off bundle needs only a 76 percent lift. The recommendation cites Hoch, Drèze and Purk and names the baseline as the assumption most likely to break.
MT102 Unit 5 rubric: what earns full points
Pricing exercises are graded on method, accuracy and interpretation. Formulas written out and figures that can be traced to their inputs earn method credit even where a small slip occurs. Accuracy matters most in the promotion block, where many students treat a free unit as a 50 percent margin loss rather than calculating the margin that actually remains. Explaining why markup on cost exceeds markup on retail shows understanding beyond computation. Interpretation after each block, rather than a single paragraph at the end, demonstrates that the numbers are being used. A recommendation that names an assumption and a figure to watch shows managerial thinking. Blattberg and colleagues, Hoch and colleagues, and Levy and coauthors support the reasoning, with APA 7 references after the recommendation. Rounding should be consistent and stated, since graders compare answers to a key.
Common MT102 Unit 5 mistakes, and how to avoid them
The most common error is computing the promotion's discount and stopping there, without the margin per unit or the break-even lift. Another is mixing markup on cost and markup on retail in the same calculation. Some students show answers without formulas, which leaves no room for partial credit. Others treat every promoted unit as new demand, ignoring shoppers who would have bought anyway. Recommendations are often missing or say only that the promotion is risky. Keep rounding consistent and state your rounding rule if the prompt gives none. If your section supplies its own scenario, the structure here still applies, block by block. Real shelf prices from a store visit can make the exercise more concrete, as long as costs are labeled as assumptions. Send us your scenario and your first attempt, and we can check each block and the break-even figure.
Get an MT102 Unit 5 example written to your instructions
Scenarios differ from one section to the next, so the given figures matter as much as the Unit 5 instructions and rubric. Forward all three, including any rounding rule the prompt sets. Every step of the custom worked example is shown with its formula, it is ready in 24-48h, and a first one is free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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MT102 Unit 5 questions, answered
Should the exercise show every formula?
Yes. Pricing rubrics usually award method separately from answers, and a grader can only give partial credit for a slip if the working is visible. Write the formula, then the substituted figures, then the result, followed by a sentence on what the result means. It takes more room, but it protects your marks when one figure goes wrong.
What is the difference between markup on cost and on retail?
Both divide the same dollar markup, but by different bases. On cost, the markup is divided by what the retailer paid; on retail, it is divided by the selling price, which always yields a smaller percentage. Retailers typically plan and report on retail, so check which base your prompt specifies and label it every time you use it.
Can I use real prices from a store I visited?
In many sections that is welcome, as long as any cost figures are clearly labeled as assumptions, since retailers do not publish what they pay suppliers. Real shelf prices make the promotion analysis more believable. Keep the given figures from your prompt wherever it supplies them, and bring in observed prices only where the scenario leaves room.
Where can I find a free MT102 Unit 5 sample paper?
This page holds the complete MT102 Unit 5 pricing exercise with markup on cost and retail, a markdown, a buy-one-get-one promotion, the break-even lift, a recommendation, references and margin notes.
Why does a free cartridge pack need such a large sales lift?
Because the free pack cuts margin per pack from $5.79 to about $0.80. To earn the same $5,790 in margin, the chain must sell about 7,283 packs instead of 1,000, a lift of roughly 628 percent.