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Question

Temporarily reducing prices to increase short-run sales is an example of which one of the following?

This question was previously asked in
UGC NET 2016 Paper 2 Management Question Paper (22-Jan-2017)
The correct answer is

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.

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Similar Questions

  1. Find the most appropriate sequence of life-cycle of price for a product, from the initial stage to the mature stage.

  2. After determining its pricing objectives, what is the next logical step a company should take in setting its pricing policy ?

  3. The practice of selling below cost, with an intention to destroying the competitor is referred to as :

  4. 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:

  5. The price setting method most closely corresponding to the concept of product positioning is:

  6. 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?

  7. 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 :

  8. The practice of selling below cost, with an intention to destroying the competitor is referred to as:

  9. After determining its pricing objectives, what is the next logical step a company should take in setting its pricing policy?

  10. 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

  1. 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:

  2. Which of the following is the characteristic of price?

  3. 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?

  4. 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:

  5. Which of the following are the informal pricing methods ?
    I. Cost plus
    II. Competitive
    III. Rate of return
    IV. Trial and error
    Codes :
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