Frito-Lay Introduced Its Stax Brand of Potato Chips to Compete

question 193

Multiple Choice

Frito-Lay introduced its Stax brand of potato chips to compete directly against Pringles. The intent was to gain market share quickly. During the first few months they were on the market, Stax retailed for 69 cents. What type of pricing strategy was Frito-Lay likely using?

• A)Price skimming
• B)Captive pricing
• C)Periodic discounting
• D)Penetration pricing
• E)Reference pricing

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Definitions:

Tax Difference

The disparity between tax rates, regulations, or benefits in different jurisdictions or between different types of investments.

Financial Statements

Summarized records of a company's financial activities, including the balance sheet, income statement, and cash flow statement.

GAAP

Generally Accepted Accounting Principles; a collection of commonly-followed accounting rules and standards for financial reporting.

Future Decision Making

The process of considering and evaluating potential actions or policies with their anticipated outcomes in the context of future events.