Stevens Outdoor Furniture has just introduced a new line of products in the southeastern United States. Owner James Bilby discovered the new line, which includes outdoor furniture and other lawn items, on a recent vacation to California. The market is extremely promising because none of his main competitors stocks this type of furniture. He’s concerned, however, about pricing because shipping costs will drive his prices higher than those charged by stores closer to the manufacturer’s West Coast factory. Initial promotion and advertising costs, as well as warehousing expenses, are also on Bilby’s mind. He’s called a teleconference with his ten store managers to develop a pricing strategy that must take effect immediately.
-If the new line of furniture is of above-average quality,prestige pricing might well work because customers will probably assume that it's of very high quality.

Question

Quizplus · Accepted Answer

Prestige pricing is a strategy where items are priced higher to signal higher quality or exclusivity, which can attract customers willing to pay more for perceived superior products. Given the unique nature of the furniture and its above-average quality, customers might indeed assume it's of very high quality and be willing to pay a premium, making prestige pricing a viable strategy.

Stevens Outdoor Furniture Has Just Introduced a New Line of Products