Find the most appropriate sequence of life-cycle of price for a product, from the initial stage to the mature stage.
Target price → penetration price → value - based price → limit price → niche price
Option 1 — Target price → penetration price → value-based price → limit price → niche price is correct.
Pricing evolves as a product moves through its life cycle. In the very first, introductory stage the firm works backwards from a desired margin, setting a target price to recover development cost and establish a reference. To build volume and market share it then shifts to a low penetration price that attracts a mass of early buyers.
As the product gains acceptance and a reputation for quality, the firm can charge according to the worth customers perceive — value-based pricing. During the growth-into-maturity phase, as rivals appear, it may adopt a limit price low enough to discourage new entrants. Finally, in the mature stage, the firm targets small, loyal, specialised segments with a premium niche price.
Why the other options are wrong: Options 2, 3 and 4 begin with penetration and scatter target, limit and niche pricing out of the introduction-to-maturity order, so the logical progression from launch reference price to mature niche pricing is broken.
Takeaway: The keyed sequence runs target → penetration → value-based → limit → niche, mirroring launch, growth and maturity.
Similar Questions
After determining its pricing objectives, what is the next logical step a company should take in setting its pricing policy ?
The practice of selling below cost, with an intention to destroying the competitor is referred to as :
Cost - Plus pricing is not suitable for :
Match the items of List - I with that of List - II and suggest the correct code :
List - I (Pricing Strategies) List - II (Explanations) (a) Customary pricing (i) Ending a price with 99 paise (b) Skimming (ii) pricing a product based on perceived expectations of customers (c) Penetration pricing (iii) Setting a high price which gradually reduces as competitors enter the market (d) Psychological pricing (iv) Offering at a low price for a new product during its initial offering Code :
Find the most appropriate sequence of life-cycle of price for a product, from the initial stage to the mature stage.
The practice of selling below cost, with an intention to destroying the competitor is referred to as:
After determining its pricing objectives, what is the next logical step a company should take in setting its pricing policy?
When the Companies pay less attention to its own costs or demands and bases its price largely on competitors’ prices, then it is known as :
Match the items of the List-I with those of the List-II and suggest the correct code from the following:
List-I List-II i. Loss Leader a. Locational price differentials ii. Unchanged Pricing b. Products with high initial demands iii. Basing Point Pricing c. Product line pricing iv. Skimming Pricing d. Oligopoly pricing Codes:
Which one of the following will be the appropriate pricing strategy for a new product expecting an expanding market?
Important Questions from Pricing decisions
Pricing practice of setting a price target and then developing a product that would allow the firm to maximise total profit at that price is called:
- Which of the following are the informal pricing methods ?
I. Cost plus
II. Competitive
III. Rate of return
IV. Trial and error
Codes : Which among the following is not an internal factor in pricing decisions?
After determining its pricing objectives, what is the next logical step a company should take in setting its pricing policy ?
The practice of selling below cost, with an intention to destroying the competitor is referred to as :
