Asked by
Monica Morales
on Dec 15, 2024
Verified
When the Swiss watchmaker TAG Heuer quadruped the average price of its watches, its sales volume jumped sevenfold. The likely cause of this volume increase is that
A) the watch market is highly conservative.
B) economies of scale in production would be substantial.
C) retailers are not willing to carry new brands of watches in this category.
D) once the initial price is set, it is nearly impossible to lower the price without alienating early buyers.
E) the watch category frequently uses prestige pricing, wherein lower prices may result in lower sales.
Prestige Pricing
A pricing strategy where goods are priced higher than their objective market value to give them an appearance of luxury and quality.
- Understand the distinct pricing methodologies and their intended strategic outcomes, including prestige pricing, target pricing, and price lining.
- Examine how pricing influences a product's market position, such as creating a perception of high quality.
Verified Answer
CN
Learning Objectives
- Understand the distinct pricing methodologies and their intended strategic outcomes, including prestige pricing, target pricing, and price lining.
- Examine how pricing influences a product's market position, such as creating a perception of high quality.