Question

Students are given 3 business scenarios

Match each scenario with the best pricing goal

Justify answers in 1–2 sentences each

Example: A new business lowers prices to attract customers → Market Share

Business Scenarios:

A technology company launches a new smartphone with advanced features. The phone is priced very high at first, targeting early adopters. After several months, the company gradually lowers the price to reach more customers.
A luxury watch brand has been in business for over 50 years. The company intentionally sets very high prices, rarely offers sales, and limits how many watches are produced each year to maintain exclusivity.
A new energy drink brand has just entered the market. It is competing with well-known brands like Red Bull and Monster. The company sets its prices lower than competitors and offers frequent discounts to attract first-time buyers and build brand awareness.
Pricing Research
Students research:

Current prices of 2–3 products from their chosen business

Identify:

Which pricing goal the company seems to use

Evidence to support their answer

Answer 1

Matches and justifications

1) Technology company launching a high‑priced smartphone then lowering price → Price skimming.
Justification: Charging a high initial price captures surplus from early adopters willing to pay more, then gradually lowering price expands the market — a classic skimming strategy to maximize early profits.

2) Luxury watch brand with very high prices, rare sales, limited production → Prestige (exclusivity) pricing.
Justification: Keeping prices high and supply limited maintains perceived luxury and status, so the goal is to preserve brand prestige and maximize long‑term brand value, not volume.

3) New energy drink entering a competitive market with lower prices and frequent discounts → Market penetration (gain market share).
Justification: Undercutting established brands and using discounts is aimed at attracting trial purchases and quickly building customer awareness and share.

Pricing research instructions (what students should do)

1. Pick a business and select 2–3 current products (include product name, exact price, date, and source link or screenshot).
2. Record competitor prices for similar products (if relevant) for comparison.
3. Decide which pricing goal the company seems to use (e.g., price skimming, penetration/market share, prestige/exclusivity, competitive parity, cost‑plus/target return, or sales/volume).
4. Provide 2–3 pieces of evidence supporting your choice (examples below show the kinds of evidence to use):
- Price level vs competitors (higher/lower/same).
- Promotional activity (frequent discounts or none).
- Product availability or production limits (limited editions, waitlists).
- Price changes over time (initial high then decreases, stable high price, consistent low pricing).
- Packaging/tiering (many price tiers suggests price discrimination/value capture).

Quick example template (fill in for your chosen business)
- Product 1: [Name] — $[price] — source: [URL] (date)
- Product 2: [Name] — $[price] — source: [URL] (date)
- Pricing goal: [e.g., Penetration / Prestige / Skimming]
- Evidence: 1) [price compared to competitors], 2) [promotions or lack thereof], 3) [availability or price history].

That will give you a clear, evidence‑backed identification of the company’s pricing goal.