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 :
Select the correct sequence of steps in setting a pricing policy:
(a) Determining Demand
(b) Analysing competitors' costs, prices and offers
(c) Selecting the Final Price
(d) Selecting the Pricing Objective
(e) Estimating costs
(f) Selecting a pricing method
Codes:
The price setting method most closely corresponding to the concept of product positioning is:
A company prices a 2 litre bottle of its mineral water at ₹ 30 but 60 ml of the same water in a moisturizer spray for ₹ 75. This is an example of which one of the following pricing practices?
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 :
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?
Find the most appropriate sequence of life-cycle of price for a product, from the initial stage to the mature stage.
Pricing decisions are most complex at which stage of the product life cycle?
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 is the characteristic of price?
In which of the following price adjustment strategies. a company reduces prices to reward customer responses such as volume purchases, paying early or promoting the product?
The consumer's price sensitivity is / are influenced by
A. Who bears the cost
B. What percentage of total expenditure does the product represent
C. Who bears the cost and type of retailer from where customer purchases
D. Consumption of product by the customer
E. Knowledge about the product
Choose the most appropriate answer from the options given below:
- Which of the following are the informal pricing methods ?
I. Cost plus
II. Competitive
III. Rate of return
IV. Trial and error
Codes :
