Hallmark was the official supplier of flowers at the last Winter Olympics. Hallmark presented each Olympic winner with a special bouquet of roses designed to resemble the Olympic torch. Consumers were able to buy a smaller version of this same bouquet at the Hallmark website for $74.95. The Olympic bouquet that consumers could buy contained two dozen yellow roses, yet you could buy the same two dozen yellow roses for less than $35 at most supermarkets. If Hallmark is treating the Olympic bouquet as an innovative product, then it is using which demand-oriented pricing approach?

Question

Quizplus · Accepted Answer

Hallmark is using skimming pricing, which involves setting a high price for an innovative product to maximize profits in the short term. Hallmark is leveraging the uniqueness and prestige of the Olympic bouquet to charge a premium price, even though the underlying product (i.e., two dozen yellow roses) is readily available for much less.

Hallmark Was the Official Supplier of Flowers at the Last