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 :
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 :
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?
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 ?
