Dizzy's Jazz Club charges potential members a $250 joining fee. In return for their annual membership fee, club members receive priority reservations for top international performers, free access to the jazz jam session held on Fridays, free access to four exclusive members- only events per year and a 50% discount on the admission price for all programmed jazz sessions. However, club members must still purchase an admission ticket as well as pay for food and beverage purchased from the bar. Dizzy's pricing is an example of:
A) offset pricing.
B) captive market pricing.
C) optional product pricing.
D) two- part pricing.
E) none of the above

Question

Quizplus · Accepted Answer

Dizzy's Jazz Club is using two-part pricing because they are charging both a joining fee and an annual membership fee. This allows them to receive a larger upfront payment while still incentivizing repeat business through the annual membership fee. Additionally, the 50% discount on admission price could be considered an example of optional product pricing, as it is an additional offer that members can choose to take advantage of or not. However, the primary pricing strategy used by the club is two-part pricing.

Dizzy's Jazz Club Charges Potential Members a $250 Joining Fee