Question

Tone Zone plans to introduce four mp3 player models over the next year. These models range from basic players at $99 per unit, to more sophisticated players at $399 per unit. The more features a model has, the more expensive it is. What pricing strategy is Tone Zone using for its range of mp3 players?

A) product line pricing
B) product bundle pricing
C) captive product pricing
D) by-product pricing
E) optional product pricing

Answer 1

Answer: Product line pricing

Explanation: In simple words, it refers to a pricing strategy under which the organisation separates its product on the basis of cost and price so that various quality products could be offered in the market to capture different classes of customers.

This strategy helps an organisation to prepare a vast customer base and is generally used by the firms in economies where there is too much income gap present and the firms offering the products are few.

Sometimes the prices are differentiated on the basis of unique quantities that have same utility value but have different customers preference.