A Skimming Pricing Policy Is Likely to Be Most Effective

question 344

Multiple Choice

A skimming pricing policy is likely to be most effective when (1) enough prospective customers are willing to buy immediately at the high initial price to make these sales profitable; (2) __________; (3) lowering the price has only a minor effect on increasing the sales volume and reducing the unit cost; and (4) customers interpret the high price as signifying high quality.

• A)the high initial price will not attract competitors
• B)consumers tend to be price-sensitive
• C)it will be easier to set measurable sales unit goals
• D)a lower price will significantly reduce unit costs
• E)consumers perceive your product to be similar to other products on the market

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Definitions:

Decay Theory

A theory suggesting that memory fades due to the mere passage of time unless it is actively reviewed.

Forgetting

The loss or decline of memory over time, which can occur due to various factors including the passage of time, interference, or failure to store information effectively.

Replacement

The act of substituting one thing for another, often to improve or repair.

Cue-dependent

Refers to the phenomenon where recall of information is improved when retrieval conditions are similar to the conditions under which the information was encoded.