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
a-iii, b-iv, c-i, d-ii
Each pricing practice in List I is matched to the pricing concept it illustrates, by asking what pricing principle the practice rests on.
Trade channel discounts mean charging different effective prices to different classes of buyers in the distribution chain, which is an instance of differential pricing, so (a)-(iii). Tie-up sales, where the purchase of one item is linked to another item of the seller's range, are handled through product-line pricing, since the prices of related products in a line are set jointly rather than independently, so (b)-(iv). A price that does not respond to changes in demand and costs is the well-known price rigidity or stickiness of oligopoly, where rivals hesitate to change price for fear of retaliation, so (c)-(i). Basing-point pricing quotes delivered price from a designated base location, which creates locational price differentials, so (d)-(ii).
Assembling these gives a-iii, b-iv, c-i, d-ii, which is the second code. The unifying thread is the basis on which price varies: by buyer class, by product line, by competitive structure, and by location.
Hence the correct match is a-iii, b-iv, c-i, d-ii.
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 :
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:
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 ?
