Which of the following is true of target pricing?
A) it is used for short-term pricing decisions.
B) it is one form of cost-based pricing.
C) a price is an estimate of customers' perceived value of the product.
D) a price is calculated by adding a markup component to the cost base.

Question

Quizplus · Accepted Answer

Target pricing is based on estimating the value that customers place on a product or service and setting a price to match that perceived value. It is not a short-term pricing decision and is not necessarily cost-based, although cost is certainly a factor in determining whether the target price is achievable. There may be a markup component to cover profit, but this is not the primary consideration in target pricing.

Which of the Following Is True of Target Pricing