The American Girl catalogue began as a concept to introduce girls who lived in the past to today's girls.Each historically accurate doll is carefully crafted and dressed and has books to describe her life.For example,Kristen is an 1854 pioneer girl who is growing up in Minnesota.Her story begins with her long sea voyage from Sweden.The basic doll dressed in a calico dress and striped apron and the hardcover story of how she got to Minnesota cost $90.Six more hardback books of Kristen's life are available for $80.Kristen's nightgown costs $20,and a matching one for the doll owner is an additional $40.Buy both together and the price is only $50.A hand-painted wooden bed and trunk for Kristen are available for $220.Shipping costs vary with the price of the merchandise ordered and are not connected to weight or distance.
-Refer to American Girl Catalogue.While a doll can be purchased at Walmart for less than $10,American Girl markets its dolls at a price much higher than the prices of its competitors.Which strategy does it most likely use?

Question

Quizplus · Accepted Answer

American Girl is using a price skimming strategy, which involves charging a high price for a product when it is first introduced into the market. This strategy is commonly used for products that are unique or have a strong brand image, like American Girl dolls. By charging a high price, American Girl is able to capture the early adopters and those who are willing to pay a premium price for the product. As time goes on, the price may be lowered to attract a wider market, but initially, American Girl is targeting a specific audience that is willing to pay a higher price for their dolls.

The American Girl Catalogue Began as a Concept to Introduce