Pharmacies are a new addition to Costco.They could exert a greater influence on the marketplace for prescription drugs than their newness indicates.Costco has a stated philosophy of marking up merchandise a maximum of 14 percent.When that philosophy is applied to prescription drugs,especially generics,warehouse club prices can be dramatically lower than those of conventional drugstores,supermarkets,or discount store pharmacies.Which type of strategy is Costco using to convince consumers to use its pharmacies rather than its competitors?
A)penetration pricing
B)price-insensitive demand
C)price skimming
D)cost bundling

Question

Quizplus · Accepted Answer

When a firm introduces a new product at a relatively low price because it hopes to reach the mass market,it is following a penetration pricing strategy.The low price is designed to capture a large share of a substantial market and produce lower production costs.

Pharmacies Are a New Addition to Costco