La Belle released a cut glass bottle of perfume at $299 per item, even though its major competitor prices its signature scent at $99 per item. La Belle reasons that customers in search of luxury goods will prefer its product because they are likelier to believe that high price indicates superior quality. What price adjustment strategy is evident in its reasoning?
A) seasonal pricing
B) time-based pricing
C) captive product pricing
D) psychological pricing
E) location-based pricing

Question

Quizplus · Accepted Answer

La Belle is using psychological pricing strategy, where they are setting a higher price for their perfume to create an impression of high quality and luxury among customers who are willing to pay a premium price to have a higher perceived value.

La Belle Released a Cut Glass Bottle of Perfume at $299