GENERAL KNOWLEDGE

Detailed explanation-1: -Companies use a premium pricing strategy when they want to charge higher prices than their competitors for their products. The goal is to create the perception that the products must have a higher value than competing products because the prices are higher.

Detailed explanation-2: -Specialty products are products with unique characteristics or brand identification. Consumers of such products are willing to exert special effort to purchase specialty products. Specialty products are typically high priced, and buyers do not use much time to compare against other products.

Detailed explanation-3: -There are many different pricing strategies, but Competitive Pricing, Cost-plus Pricing, Markup Pricing and Demand Pricing are four common methods for small business owners to use.

Detailed explanation-4: -At higher prices, small changes in price correspond to smaller changes in quality. In all cases, however, higher prices correspond to higher levels of the quality. It is important to remember that we observe a price-quality relationship in the absence of competition between the geographic market segments.