Temporarily reducing prices to increase short-run sales is an example of which one of the following?
Promotional pricing
The clue in the question is that the price cut is temporary and its purpose is to lift sales in the short run, so we look for the pricing type defined by exactly that behaviour.
Promotional pricing is the practice of reducing prices for a short period - through sales, seasonal discounts, coupons, cash rebates and special-event offers - specifically to boost short-term sales or clear stock, after which prices return to normal. That fits the description precisely.
Segmented pricing charges different prices to different buyers, product versions or locations for reasons not based on cost; dynamic pricing changes prices continually in real time as demand and supply shift; and geographical pricing sets different prices according to the buyer's location and freight. None of these is defined by a temporary cut aimed at short-run sales.
Hence temporarily reducing prices to increase short-run sales is an example of promotional 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 :
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
- 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 ?
The practice of selling below cost, with an intention to destroying the competitor is referred to as :
