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Saffron Spas Inc

question 6

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Saffron Spas Inc.has two membership schemes meant to attract different customer segments.The executive membership program priced at $1000 allows for unlimited usage of the services available in the spa chain up to a year.The premium membership program priced at $700 allows for limited usage of the spa services up to a year.According to this information,which of the following pricing strategies is adopted by Saffron Spas Inc.?


Definitions:

Making Part

The process involved in the creation or manufacturing of components that will be used in the assembly of a final product.

Purchasing Part

A component required in the production process or maintenance of equipment, acquired through the procurement process.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much contributes to covering fixed costs and generating profit.

Normal Sales

The expected amount of sales based on historical data, market conditions, and economic forecasts, under regular business operations.

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