Question

Nirmala dairy farms have been in the business of processing pure ghee using the ‘Bilona technique’. The cost per kilo of ghee comes out to be ₹ 2000. The owners have estimated that a reasonable profit margin will be 25%. So they have decided to sell the product at ₹ 2500 per kilo.

On the basis of the given text, identify which of the following is the drawback of the indicated pricing strategy and choose the correct option:

Options

• It attracts only the bargain hunters who switch to other brands if the price rises.

• Is not a viable option if there are strict legal and government regulations.

• It does not take into account the competitor's pricing and actions.

• It leads to a series of counteroffers that sometimes result in no sale.

Answer 1

It does not take into account the competitor's pricing and actions.