The price setting method most closely corresponding to the concept of product positioning is:
Perceived-value pricing
Positioning is about the place a product occupies in the customer's mind relative to competing offers, so the pricing method that corresponds to it must be the one driven by customer perception.
That method is perceived-value pricing. Here the firm sets price on the basis of the value that buyers perceive the offering to deliver, taking into account the product's performance, brand reputation, service, warranty and other elements that shape the customer's judgement. Because both positioning and perceived-value pricing start from how the customer sees the product rather than from the firm's costs or from rivals' prices, the two fit together directly: the price becomes a signal and confirmation of the position claimed.
Cost-plus pricing works from the firm's own cost plus a mark-up and takes no account of how customers value the product. Going-rate pricing simply follows the prevailing price of competitors, so it is driven by rivals rather than by the customer's perception. Psychological pricing manipulates price endings and reference points to affect perception of the price itself, which is a tactic rather than a positioning-based method.
Hence the price setting method corresponding most closely to product positioning is perceived-value pricing.
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:
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?
Pricing decisions are most complex at which stage of the product life cycle?
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 Match the following:
List - I List - II (a) Customer-segment pricing (i) Pricing products differently but not proportionately to their costs (b) Product-form pricing (ii) Pricing products differently even though the cost of offering at that arena is the same (c) Location pricing (iii) Pricing differently even though the products are the same (d) Time pricing (iv) Pricing differently for the different seasons Arrange the following step of pricing process in a logical order :
A. Analyse competitiors’ price
B. Estimate demand and revenue
C. Select pricing method
D. Assess pricing objectives
E. Determine Cost
Choose the correct answer from the options given below :
A market penetration pricing strategy is suitable when
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 :
