Elmo Inc., a global conglomerate, designed the ElBrush, an electric toothbrush. Sensing market demand for the electric toothbrush, Elmo started with an ideal selling price of $13 based on customer value considerations and then targeted costs to ensure that the price was met. This exemplifies ________.
A) competition-based pricing
B) cost-plus pricing
C) target costing
D) everyday low pricing
E) high-low pricing

Question

Quizplus · Accepted Answer

This scenario exemplifies target costing, as Elmo Inc. started with an ideal selling price based on customer value considerations and targeted costs to ensure that the price was met. This is a common approach used by companies when introducing new products to the market.

Elmo Inc, a Global Conglomerate, Designed the ElBrush, an Electric Toothbrush