When microwave ovens were in the introduction stage of their product life cycle, some consumers were willing to pay exorbitant prices for these innovative ovens. Taking advantage of this strong consumer desire, marketers set the price for microwave ovens at the highest initial price possible. Marketers of microwave ovens used a __________ pricing strategy. skimming bundle prestige penetration price lining
Skimming pricing strategies are used for new, innovative products that are highly sought after by a significant number of customers. Such customers are relatively insensitive to price because of the product's ability to satisfy their needs and wants in relation to alternative products. A hardware store advertises a ⅜-inch Black and Decker Power Drill for $29.95. You enter the store intending to purchase the drill. The salesperson informs you that they are all sold out. She tells you that the "sale" drills were factory seconds and that if you are going to be doing any kind of serious woodworking, you should buy the Model 3309, which sells for $49.99. This scenario has elements of which type of illegal pricing practice? conditional bargains bait and switch price fixing price discrimination predatory pricing This scenario has all the elements of bait and switch, which is a deceptive practice whereby a firm offers a very low price on a product (the bait) to attract customers to a store. Once in the store, the customer is persuaded to purchase a higher-priced item (the switch) using a variety of tricks, including not having the item in stock and downgrading the item. See Figure 14-10 in the textbook.
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- Summer '14