If a manager designs the shoe department in a manner that one of its private label pairs of shoes, priced at $69.99, is positioned next to a well-known national brand of shoes priced at $89.99, what strategy is the manager attempting to accomplish?
A) Everyday low price
B) Odd-even pricing
C) Prestige pricing
D) Special-event pricing
E) Reference pricing

Question

Quizplus · Accepted Answer

The manager is attempting to use reference pricing strategy by positioning a private label shoe next to a well-known national brand priced higher than the private label shoe. The idea behind this strategy is that customers will use the well-known brand as a reference point for the price of the private label shoe and perceive it as a good value since it is priced lower than the national brand.

If a Manager Designs the Shoe Department in a Manner