ENTREPRENEURIAL MARKETING
PRICING STRATEGIES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A company’s manufacturing plant is located in Sacramento, California. After the products are made, they are shipped to stores across the country. Why would the price in a store in Portland, Maine, be higher than the price for the same product in a store in San Francisco, California? Think about the information given in the question and choose the best answer.
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The product costs more in Portland, Maine, because there is a higher need for it there.
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The store in San Francisco is geographically closer to the manufacturing plant, so there is less shipping cost included in the price.
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The store in Portland, Maine, is geographically closer to the manufacturing plant, so there is less shipping cost included in the price.
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The product costs less in San Francisco because there is not a market for it.
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Explanation:
Detailed explanation-1: -The price at which the product is sold to the end customer is called the retail price of the product. Retail price is the summation of the manufacturing cost and all the costs that retailers incur at the time of charging the customer.
Detailed explanation-2: -Value pricing: this strategy is based on what customers think a product or service is worth, rather than actual costs. The value is determined through market testing and a price is set based on this value. For example, sometimes customers will pay more if it saves them a lot of time.
There is 1 question to complete.