The pricing approach that (1) estimates the price that ultimate consumers would be willing to pay for a product; (2) works backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers; and (3) results in the manufacturer deliberately adjusting the composition and features of the product to achieve the price to consumers is referred to as
A)cost-benefit pricing.
B)cost-plus percentage-of-cost pricing.
C)target pricing.
D)cost-plus fixed-fee pricing.
E)product feature pricing.

Question

Quizplus · Accepted Answer

This pricing approach is known as target pricing. It involves estimating the price that consumers are willing to pay and then working backward to determine the price to charge wholesalers and retailers. The manufacturer adjusts the features, composition, etc. of the product to achieve the desired price for consumers. Cost-benefit pricing, cost-plus percentage-of-cost pricing, cost-plus fixed-fee pricing, and product feature pricing are different types of pricing approaches.

The Pricing Approach That (1) Estimates the Price That Ultimate