A manufacturer of tablet computers has designed a unique new product that can network with satellites to access streaming video and television channels. This device does not need a Wi-Fi connection and can be accessed anywhere in the world by logging onto the site. Besides serving as a portable computer, this device bypasses the need for a consumer to purchase cable or personal satellite dish access. Which approach to pricing makes the most sense for the company to use first?
A) Set the price extremely high until competing products are developed
B) Set the price to match the manufacturing of the device under a private label
C) Set the price extremely low in order to capture more of the current market share
D) Set the price to match other computer and television devices sold by competitors
E) Set the price extremely low in order for consumers to purchase it without needing a coupon

Question

A manufacturer of tablet computers has designed a unique new product that can network with satellites to access streaming video and television channels. This device does not need a Wi-Fi connection and can be accessed anywhere in the world by logging onto the site. Besides serving as a portable computer, this device bypasses the need for a consumer to purchase cable or personal satellite dish access. Which approach to pricing makes the most sense for the company to use first? ​
A) Set the price extremely high until competing products are developed
B) Set the price to match the manufacturing of the device under a private label
C) Set the price extremely low in order to capture more of the current market share
D) Set the price to match other computer and television devices sold by competitors
E) Set the price extremely low in order for consumers to purchase it without needing a coupon

Quizplus · Accepted Answer

Setting the price extremely high until competing products are developed makes the most sense for the company initially because it has a unique product with no direct competition, allowing it to capitalize on its novelty and exclusivity. This strategy, often referred to as price skimming, enables the company to maximize profits from early adopters willing to pay a premium for the latest technology.

A Manufacturer of Tablet Computers Has Designed a Unique New