Why Is Price Lining Is a Valuable Tactic for Marketing

question 30

Multiple Choice

Why is price lining is a valuable tactic for marketing managers?

• A)Price lining results in a greater inventory carrying charge.
• B)A company that uses price lining is able to carry a smaller total inventory and reduce confusion for its customers.
• C)A company that uses price lining has more price markdowns and greater markup.
• D)The price lining strategy allows the company to gain brand loyalty from its targeted segments.

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Definitions:

Rival Consumption

A situation in which one person's consumption of a good or service diminishes others' ability to consume the same good or service.

Excludable

A characteristic of a good or service that allows its owner to prevent others from using it without permission.

Nonexcludable

A characteristic of a good or service whereby individuals cannot be effectively excluded from using it, often resulting in public goods.

Public Good

A product or service that is made available to all members of society, characterized by non-excludability and non-rivalry in consumption.