Target pricing refers to
A)a method of selecting specific prices wholesalers and retailers are willing to pay oriented upon the elasticity of each given item.
B)a method of charging different prices to maximize revenue for a set amount of capacity at any given time.
C)the practice of simultaneously increasing product and service benefits while maintaining or decreasing price.
D)method of (1) estimating the price that ultimate consumers would be willing to pay for a product, (2) working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers, and (3) deliberately adjusting the composition and features of the product to achieve the target price.
E)method of estimating the price that ultimate consumers would be willing to pay for a product, determining how much wholesalers wish to charge its customers, and the deliberately adjusting the composition and features of the product to achieve the target price to consumers.

Question

Quizplus · Accepted Answer

Target pricing is a method of setting prices by estimating the price that ultimate consumers would be willing to pay for a product, working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers, and deliberately adjusting the composition and features of the product to achieve the target price. Option A is incorrect as it talks about the willingness of wholesalers and retailers and their elasticity, which is a part of cost-plus pricing. Option B is referring to yield management pricing. Option C is describing value-based pricing. Option E is incorrect as it talks about determining the price that wholesalers wish to charge their customers, which is not a part of target pricing.

Target Pricing Refers to