Which Pricing Tactic Calls for Offering Three Similar Products, One

question 54

Multiple Choice

Which pricing tactic calls for offering three similar products, one that is lower priced and less attractive and two that are comparable but more expensive?

• A) peak load pricing
• B) decoy pricing
• C) bottom-of-the-pyramid pricing
• D) keystoning
• E) high/low pricing

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Definitions:

Present Value Methods

Techniques used to estimate the current value of future cash flows, discounting them at a specified rate.

Current Dollars

A term referring to the value of a monetary unit, such as a dollar, in terms of its purchasing power at the current time, not adjusted for inflation.

Time Value

The idea that money currently in hand is valued higher than an identical sum to be received in the future because of its ability to generate earnings.

Present Value

The present value of a sum of money to be received in the future, or a series of future cash flows, calculated using an agreed-upon rate of return.