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 :
Cost - Plus pricing is not suitable for :
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:
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 ?
