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Question
______ is the most common method used for pricing.
Options
Cost plus pricing
Target pricing
Break-even-pricing
Marginal cost
Solution
Cost plus pricing is the most common method used for pricing.
Explanation:
Cost-plus pricing is a straightforward and widely used pricing method in which a fixed percentage (markup) is added to the cost of producing a product to determine its selling price. This approach ensures that all costs are covered and a profit margin is achieved. It's commonly used because of its simplicity and the ease with which it can be applied across various products and industries.
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RELATED QUESTIONS
State any two advantages of cost-plus pricing strategy.
It is also known as 'going rate pricing' or competition based pricing.
Markup pricing is also called as ______.
______ price refers to the high initial price charged when a new product is introduced in the market.
"Competition based pricing is ideal for non-branded products." Comment.
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What is penetrating pricing?
| Evergreen Cosmetics is planning to launch a new range of 'anti-wrinkle creams' in the Indian market. They conducted a market survey and found potential competition from Remain Young. Since they are targeting the higher strata of society, the cream is being priced much higher than their competitors. They plan to use the television as a media to advertise this anti-wrinkle cream as opposed to print media which is largely used by them for their other products. Officials at Evergreen Cosmetics feel that with the correct style of promotion, they could easily be successful in the market. |
- Identify and explain the pricing strategy that is being used by Evergreen Cosmetics.
- Describe any two qualities that a salesman selling this product should possess.
- Explain any two tools of sales promotion that can be used here.
What pricing strategy will be used to launch shampoo?
Discuss the pros of Penetrating Pricing Policy.
