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A Smartphone Manufacturer Introduced a New Device into the Marketplace

question 97

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A smartphone manufacturer introduced a new device into the marketplace with pricing set according to the skimming approach. The CEO of the company reviews financial reports from the device and notes that the pricing approach used is not cost-effective for the company. How should the CEO adjust the pricing strategy for this device? ​


Definitions:

New Businesses

Entities that have been recently established and are in the early stages of their operational and financial life cycle, facing unique challenges such as market entry and funding.

Credit Card Company

A financial institution that issues credit cards to consumers, offering a revolving line of credit that can be used to make purchases, transfer balances, and/or access cash advances.

Percentage Of Sale

A commission structure where payment is based on a percentage of the sales made.

Prestige Pricing

A pricing strategy where prices are set higher than average to present the image of exclusivity and high quality.

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