The pricing strategy that begins with the determination of a price at which a product will sell and then focuses on developing a cost s
A) cost-plus pricing.
B) prestige pricing.
C) developmental pricing.
D) target costing.

Question

Quizplus · Accepted Answer

The pricing strategy described in the question is target costing, which starts with the determination of the price at which a product will sell, and then focuses on developing a cost structure that will allow the product to be sold at that price while still achieving a desired level of profitability. Cost-plus pricing (A) involves adding a markup to the cost of a product to arrive at a selling price, while prestige pricing (B) involves setting a high price to create the perception of exclusivity and quality. Developmental pricing (C) is not a commonly used term in marketing and does not describe a specific pricing strategy.

The Pricing Strategy That Begins with the Determination of a Price