Match the items of List - I with that of List - II and suggest the correct code : 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
(a)-(ii), (b)-(iii), (c)-(iv), (d)-(i)
Option 2 — (a)-(ii), (b)-(iii), (c)-(iv), (d)-(i) is correct.
Each pricing strategy is defined by how the price is set relative to costs, competitors and customer psychology. Working through the pairs:
| Strategy | Meaning |
|---|---|
| (a) Customary pricing | (ii) The product is priced to match what customers expect to pay – a traditional, accepted price built on perceived expectations. |
| (b) Skimming | (iii) A deliberately high launch price aimed at early adopters, then lowered as rivals enter and the market broadens. |
| (c) Penetration pricing | (iv) A deliberately low introductory price to win volume and market share quickly for a new product. |
| (d) Psychological pricing | (i) Prices set just below a round figure (e.g. ending in 99 paise) so buyers perceive them as lower. |
Skimming and penetration are opposite launch strategies – high-then-falling versus low-and-aggressive – so mixing them up is the usual trap. Only option 2 keeps skimming with (iii) and penetration with (iv) while matching customary to (ii) and psychological to the 99-paise cue (i).
Takeaway: skim high, penetrate low, customary = expected price, psychological = odd-number pricing — that ordering gives option 2.
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?
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.
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 :
