Question
Which is an example of a demand-oriented approach to setting an approximate price?
Multiple choice question.
experience curve
loss leader
skimming pricing
target return on sales
Multiple choice question.
experience curve
loss leader
skimming pricing
target return on sales
Answers
GPT-4o mini
The best example of a demand-oriented approach to setting an approximate price from the options provided is **skimming pricing**.
Skimming pricing involves setting a high price initially and then gradually lowering it over time, which is often used when a product is first launched and there is strong demand from early adopters who are willing to pay more. This approach reflects the demand side of pricing strategy.
The other options:
- **Experience curve** is more about cost reduction over time as production experience increases.
- **Loss leader** refers to pricing a product below cost to attract customers to other products.
- **Target return on sales** focuses on achieving a specific profit margin rather than directly on consumer demand.
So, the correct answer is **skimming pricing**.
Skimming pricing involves setting a high price initially and then gradually lowering it over time, which is often used when a product is first launched and there is strong demand from early adopters who are willing to pay more. This approach reflects the demand side of pricing strategy.
The other options:
- **Experience curve** is more about cost reduction over time as production experience increases.
- **Loss leader** refers to pricing a product below cost to attract customers to other products.
- **Target return on sales** focuses on achieving a specific profit margin rather than directly on consumer demand.
So, the correct answer is **skimming pricing**.