You are the head of pricing strategy for your firm, and you are very excited about a new point-of-sale system that has just been installed in all your firm's retail outlets. The system is a state-of-the-art, real-time information system that captures the details of every sale made in your retail outlets. Now you will have up-to-the-minute data on sales volume trends and performances for your entire product line. You plan to use this data to set prices based on these volume trends.
Which of the following bases for pricing are you intending to use?
A) Markup pricing
B) Competition-based pricing
C) Demand-based pricing
D) Cost-based pricing
E) Cost-plus pricing

Question

Quizplus · Accepted Answer

The pricing strategy being described is demand-based pricing. The real-time information system will allow the head of pricing strategy to gather data on sales volume trends and use that information to set prices based on demand. This approach focuses on setting prices based on what customers are willing to pay for the product, rather than costs or competition.

You Are the Head of Pricing Strategy for Your Firm