Pharmacies are a new addition to Sam's Clubs.They could exert a greater influence on the marketplace for prescription drugs than their newness indicates.Sam's has a stated philosophy of marking up merchandise a maximum of 14 percent.When that philosophy is applied to prescription drugs,especially generics,warehouse club prices can be dramatically lower than those of conventional drugstores,supermarkets,or discount store pharmacies.Sam's is using a _____ strategy to convince consumers to use its pharmacies rather than its competitors.
A) penetration pricing
B) price-insensitive demand
C) price-skimming
D) price elasticity
E) cost bundling

Question

Quizplus · Accepted Answer

When a firm introduces a new product at a relatively low price because it hopes to reach the mass market,it is following a penetration pricing strategy.The low price is designed to capture a large share of a substantial market and produce lower production costs.

Pharmacies Are a New Addition to Sam's Clubs