Stevens Outdoor Furniture has just introduced a new line of products in the southeastern United States. Owner James Bilby discovered the new line, which includes outdoor furniture and other lawn items, on a recent vacation to California. The market is extremely promising because none of his main competitors stocks this type of furniture. He’s concerned, however, about pricing because shipping costs will drive his prices higher than those charged by stores closer to the manufacturer’s West Coast factory. Initial promotion and advertising costs, as well as warehousing expenses, are also on Bilby’s mind. He’s called a teleconference with his ten store managers to develop a pricing strategy that must take effect immediately.
-Demand-based pricing would never work in this situation.

Question

Quizplus · Accepted Answer

Demand-based pricing could be effective in this situation because it focuses on setting prices based on what the market is willing to pay, considering the uniqueness and lack of direct competition for the new line of outdoor furniture in the southeastern United States.

Stevens Outdoor Furniture Has Just Introduced a New Line of Products