Your Friend Claire Has Just Shared That She Dreams of Owning

question 31

Multiple Choice

Your friend Claire has just shared that she dreams of owning a world-famous Hermes Birkin handbag someday. When you inform her that there is a waiting list for these exclusive handbags, which usually sell for $12,000 and up, she says she's waiting for them to go on sale. What do you know about pricing that would influence how you respond?

• A) High-end, exclusive brands are always expensive, even when they're on sale, so you would discourage her from spending that much money on a handbag.
• B) The high price of this product indicates exceptional quality and prestige, so you would encourage Claire to pay full price for the handbag.
• C) Prices usually drop when demand drops, so you should encourage Claire to wait for those conditions.
• D) Manufacturers of high-end, exclusive brands usually do not allow discounting to protect the prestige of the brand, so you should tell Claire that she probably won't ever see a sale.

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Definitions:

Financial Success

The achievement of financial objectives and stability, often measured by profitability, growth, and value generation.

IPO

Initial Public Offering, the process by which a private company goes public by offering its stocks to the public for the first time.

Aided Recall Test

A performance metric in which respondents are asked to recall advertisements based on clues they receive to help stimulate their memory.

Unaided Recall Test

A measure of memory in which participants are asked to remember information without being given cues or hints.