A company that distributes cognac decides to set prices high to convey an image of quality and exclusivity. Taking this approach is an example of:
A) promotional pricing.
B) prestige pricing.
C) bait pricing.
D) positioning pricing.

Question

Quizplus · Accepted Answer

understand the objectives that guide pricing strategies. Prestige pricing involves setting prices high to convey an image of prestige, quality and exclusivity. This is effective when consumers cannot objectively evaluate the quality of the product, and therefore use the high price as a proxy measure of high quality.

A Company That Distributes Cognac Decides to Set Prices High