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Pricing Decision - 1 - B Com MCQ


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10 Questions MCQ Test - Pricing Decision - 1

Pricing Decision - 1 for B Com 2024 is part of B Com preparation. The Pricing Decision - 1 questions and answers have been prepared according to the B Com exam syllabus.The Pricing Decision - 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Pricing Decision - 1 below.
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Pricing Decision - 1 - Question 1
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What pricing strategy involves setting the price of a product artificially low to gain market share and gradually increasing it afterward?

Detailed Solution for Pricing Decision - 1 - Question 1
Penetration pricing is a strategy where a product is initially priced lower than its market value to attract a large number of customers and gain a substantial market share. Once the market share is established, the price is gradually increased. This approach is often used to capture attention and build customer loyalty before transitioning to higher pricing.
Pricing Decision - 1 - Question 2
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Which pricing strategy involves offering a product or service at a very low price with minimal marketing and promotion costs?

Detailed Solution for Pricing Decision - 1 - Question 2
Economy pricing is characterized by offering products at a no-frills, low price. Marketing and promotional expenses are kept minimal to reduce costs. Budget airlines and some supermarket products often adopt this strategy to cater to price-sensitive consumers.
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Pricing Decision - 1 - Question 3
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Price skimming is a strategy where a company charges a higher price due to:

Detailed Solution for Pricing Decision - 1 - Question 3
Price skimming involves charging a higher price because the company possesses a substantial competitive advantage that is not easily sustainable over time. While the high price initially attracts customers, it often leads to new competitors entering the market, resulting in eventual price decreases.
Pricing Decision - 1 - Question 4
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When a company offers optional extras to increase the overall price of a product or service, it is using which pricing strategy?
Detailed Solution for Pricing Decision - 1 - Question 4
Optional product pricing involves offering additional features or extras that can be added to a product or service for an extra charge. This approach aims to increase the overall price that customers spend once they start buying.
Pricing Decision - 1 - Question 5
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Which pricing approach aims to appeal to consumers' emotional responses by using slightly lower price points, such as $0.99 instead of $1?
Detailed Solution for Pricing Decision - 1 - Question 5
Psychological pricing is designed to trigger emotional responses from consumers by setting prices slightly below whole numbers, such as $0.99 instead of $1. This approach takes advantage of consumer perceptions and behavior when making purchase decisions.
Pricing Decision - 1 - Question 6
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Captive product pricing is used when:
Detailed Solution for Pricing Decision - 1 - Question 6
Captive product pricing is applied when a company sells a product at a lower price, knowing that consumers will need to buy complementary items at a higher price. This strategy is often seen with razors and inkjet printers, where the main product is priced lower, and profits are made on the complementary items.
Pricing Decision - 1 - Question 7
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Product bundle pricing involves:
Detailed Solution for Pricing Decision - 1 - Question 7
Product bundle pricing involves offering multiple products together as a package deal. This strategy can help move slow-selling products and provide consumers with added value by offering multiple items at a combined price.
Pricing Decision - 1 - Question 8
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Promotional pricing includes strategies such as:
Detailed Solution for Pricing Decision - 1 - Question 8
Promotional pricing involves various strategies to promote a product, including BOGOF (Buy One Get One Free), money-off vouchers, and discounts. These strategies are often used to attract customers and boost sales temporarily.
Pricing Decision - 1 - Question 9
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Which external factor affects pricing decisions by considering the competition level in the market?
Detailed Solution for Pricing Decision - 1 - Question 9
The degree of competition in the market is an external factor that influences pricing decisions. In a highly competitive market, prices may be set lower to attract customers, while in less competitive markets, prices could be higher.
Pricing Decision - 1 - Question 10
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During a recession, how might economic conditions affect pricing decisions?
Detailed Solution for Pricing Decision - 1 - Question 10
During a recession, consumers often have reduced purchasing power. To encourage spending, companies may lower prices to attract price-sensitive consumers and maintain sales levels despite the economic downturn.
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