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 basis 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

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 basis 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

Quizplus · Accepted Answer

The pricing strategy described in the scenario is demand-based pricing, as the pricing decision is based on the sales volume trends and performances for the entire product line. This approach involves setting prices based on the level of demand for the product and aims to maximize revenue by adjusting prices in response to changes in demand. Markup pricing is based on adding a percentage to the cost of the product, competition-based pricing involves setting prices based on competitor pricing, cost-based pricing involves pricing based solely on the cost of producing the product, and cost-plus pricing involves adding a markup to the cost of the product to determine price. None of these pricing approaches are explicitly mentioned in the scenario.

You Are the Head of Pricing Strategy for Your Firm