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 target 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

The description provided fits the definition of target pricing, which involves determining the price consumers are willing to pay and then adjusting the product features and composition to achieve that price, working backward through markups taken by intermediaries. Cost-benefit pricing involves considering the benefits to customers, cost-plus percentage-of-cost pricing involves adding a markup to the product cost, cost-plus fixed-fee pricing involves adding a fixed fee or profit margin to the product cost, and product feature pricing involves pricing a product based on its unique features. None of these fully match the given description.

Pricing Approach That: (1)estimates the Price That Ultimate Consumers Would