Hallmark was the official supplier of flowers at the last Winter Olympics. It was the first time that it has participated in the Olympics. Hallmark presented each Olympic winner with a special bouquet of roses designed to resemble the Olympic torch. Consumers can buy a smaller version of this same bouquet at the Hallmark website for $74.95. The Olympic bouquet that consumers can buy contains two dozen yellow roses, yet you can buy two dozen yellow roses for less than $35 at most supermarkets. If Hallmark is treating the Olympic bouquet as an innovative product, then it is using which demand-oriented approach to pricing?

Question

Quizplus · Accepted Answer

Hallmark is using skimming pricing, which involves setting a high price for a new and innovative product. The Olympic bouquet is a unique and special product designed specifically for the Olympics, so Hallmark is able to charge a premium price for it. The fact that consumers can buy a similar bouquet for much less at a supermarket is not relevant, as consumers are willing to pay extra for the Olympic-themed bouquet from Hallmark.

Hallmark Was the Official Supplier of Flowers at the Last