Match the items of the List-I with those of the List-II and suggest the correct code from the following: Codes: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
i-c, ii-d, iii-a, iv-b
Each item in List-I is a specific pricing practice, and it has to be paired with the idea in List-II that best describes it.
A loss leader is an item priced very low - sometimes below cost - to pull customers into the store, expecting them to buy other, profitable products of the same line while they are there; this is a use of product line pricing (i-c).
Unchanged pricing describes the behaviour under oligopoly, where a few large firms dominate: each firm hesitates to change its price because rivals may retaliate, so prices tend to stay sticky (the kinked-demand idea); hence it pairs with oligopoly pricing (ii-d).
Basing point pricing quotes the delivered price as a base-mill price plus freight calculated from a fixed base location regardless of where the goods actually ship from, which produces price differences by location; hence it pairs with locational price differentials (iii-a).
Skimming pricing sets a high launch price to take advantage of buyers whose demand is strong at the start and who are willing to pay a premium; hence it pairs with products with high initial demands (iv-b).
Putting these together gives the code i-c, ii-d, iii-a, iv-b.
Hence the correct match is i-c, ii-d, iii-a, iv-b.
Similar Questions
Find the most appropriate sequence of life-cycle of price for a product, from the initial stage to the mature stage.
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?
Pricing decisions are most complex at which stage of the product life cycle?
Match the items of the following two lists and indicate the correct code:
List - I List - II a. Trade channel discounts i. Oligopoly pricing b. Tie-up sales ii. Locational price differentials c. Price being non-responsive to changes in demand costs iii. Differential pricing d. Basing-point pricing iv. Product-line pricing Match the following:
List - I List - II (a) Customer-segment pricing (i) Pricing products differently but not proportionately to their costs (b) Product-form pricing (ii) Pricing products differently even though the cost of offering at that arena is the same (c) Location pricing (iii) Pricing differently even though the products are the same (d) Time pricing (iv) Pricing differently for the different seasons Arrange the following step of pricing process in a logical order :
A. Analyse competitiors’ price
B. Estimate demand and revenue
C. Select pricing method
D. Assess pricing objectives
E. Determine Cost
Choose the correct answer from the options given below :
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 :
