Natural Well, a Local Supplier of Natural Bottled Water, Initially

question 36

Multiple Choice

Natural Well, a local supplier of natural bottled water, initially sold its product at a premium price of $4 because the company believed consumers would view the bottled water as a prestige item. The company decided that when startup costs had been fully recovered and competition became imminent, the company would reduce the price to a more reasonable $1. Natural Well is implementing a

• A) variable pricing strategy.
• B) skimming price strategy.
• C) penetration pricing strategy.
• D) price lining strategy.

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Definitions:

Industrial Investment

Funds allocated towards the development or expansion of industrial activities, including manufacturing and production facilities.

Secondary Market

The marketplace for buying and selling previously issued securities or financial instruments, such as stocks and bonds.

Initial Sale

The first time a company's product or service is sold, marking the beginning of its commercial journey.

Security

A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.