Match the List-I with List-II Choose the correct answer from the options given below:LIST I
Pricing situationLIST II
DescriptionA. Product line Pricing I. Pricing optional or accessory products sold with the main product B. Optional product pricing II. Setting prices across an entire product line C. Captive product Pricing III. Pricing low value by product to get rid of or make money on them. D. By-Product Pricing IV. Pricing products that must be used with the main product.
A-II, B-I, C-IV, D-III
A-II, B-I, C-IV, D-III — option 3. Each pairing is essentially the definition of the term.
| Situation | Description | Illustration |
|---|---|---|
| A. Product line pricing | II — setting prices across an entire product line | Price steps between models in a range, reflecting cost differences, customer evaluations of features, and competitors’ prices — a car sold in base, mid and top variants |
| B. Optional product pricing | I — pricing optional or accessory products sold with the main product | Extras the buyer may choose — a sunroof, an extended warranty, a larger battery. The base price is often kept low and the options carry the margin |
| C. Captive product pricing | IV — pricing products that must be used with the main product | Printers and cartridges, razors and blades, consoles and games. The main product is priced low and the captive item high, since the buyer has no choice once committed |
| D. By-product pricing | III — pricing low-value by-products to dispose of them or make money on them | Residues of the main process — molasses from sugar, bran from flour. Any price above the cost of storing and delivering them lets the producer reduce the main product’s price and compete harder |
The distinction that decides the question is B against C, and it turns on a single word: optional means the buyer may take it or leave it; captive means he cannot use the main product without it. That is why captive pricing supports so aggressive a margin — and why regulators and consumers watch it.
The full set of product-mix pricing situations, of which these four are part :
| Situation | Content |
|---|---|
| Product line pricing | Price steps across a range |
| Optional-product pricing | Accessories and extras |
| Captive-product pricing | Necessary companions; in services, two-part pricing — a fixed fee plus a variable usage charge |
| By-product pricing | Residues of the process |
| Product bundle pricing | Several products sold together at a reduced combined price |
The common thread is that the firm sets prices to maximise the profit of the whole mix, not of each item separately — which is why a printer may be sold at or below cost.
Hence, the answer is A-II, B-I, C-IV, D-III.
Similar Questions
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.
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 :
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?
Temporarily reducing prices to increase short-run sales is an example of which one of the following?
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:
Cost - Plus pricing is not suitable for :
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 :
