Yurgen is opening a financial consulting service for high-income retirees in his area.This target market is used to paying for quality and associates high quality with high prices.In this instance,Yurgen should probably not use a market penetration pricing strategy because
A) he might be missing out on customers who would only pay less for his products.
B) there are moderate barriers to competitive entry in the market.
C) a low price might signal low quality.
D) he would have to determine zone pricing discounts.
E) the experience curve effect would drop unit costs too rapidly.

Question

Quizplus · Accepted Answer

The target market associates high quality with high prices. If Yurgen uses a market penetration pricing strategy (lower price to gain market share), it might signal low quality to his target market and discourage them from purchasing his service.

Yurgen Is Opening a Financial Consulting Service for High-Income Retirees