A Penetration Pricing Strategy Is Called _____ Pricing When It

question 19

Multiple Choice

A penetration pricing strategy is called _____ pricing when it implements the premise that a lower-than-market price will attract buyers and move a brand from an unknown newcomer to brand-recognition or brand-preference stage.

• A) market-plus
• B) market-minus
• C) EDLP
• D) FOB

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Definitions:

Spreading Effect

The financial strategy of distributing investments across various assets to reduce risk and potentially increase returns.

Fixed Cost

Costs that do not vary with the level of output or activity.

Output

The aggregate production of either goods or services by an organization, commercial sector, or the economy as a whole.

Diminishing Returns Effect

A principle in economics where increasing one factor of production, while keeping others constant, will at some point yield lower per-unit returns.