The Maker of Oral-B Toothbrushes Is Introducing a New Electric

question 22

Multiple Choice

The maker of Oral-B toothbrushes is introducing a new electric plaque remover and expects considerable competition. What pricing strategy would be appropriate for this maker to choose?

• A) Price skimming
• B) Penetration pricing
• C) Odd-even pricing
• D) Prestige pricing
• E) Psychological pricing

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Definitions:

Divisional Operating Income

The profit earned by a specific division or segment of a company after deducting all direct and indirect expenses but before interest and taxes.

Top Management

The highest tier of executives and decision-makers in an organization, responsible for overall strategy and policies.

Cost Price Approach

An approach to transfer pricing that uses cost as the basis for setting the transfer price.

Transfer Price

The price charged one decentralized unit by another for the goods or services provided.