Question

Suppose zara wants to know how much more consumers are willing to pay for its clothing line relative to other comparable clothing stores. the company performs research to determine how its customers value zara's clothing—in terms of quality, style, and versatility—compared with similar clothing that the customers have purchased elsewhere. which method is zara using to determine pricing in this scenario

Answer 1

Zara is using the improvement value method to determine pricing on her clothing line. The improvement value method is an indication of how much more or less a consumer is willing to pay for a product that compares to another product set at a difference price point. Using this method, it allows the company to set a fair price of their product that keeps it within the budget of their target consumer.

Answer 2

The fact that Zara is using a research method to determine how its customers value Zara's clothing—in terms of quality, style, and versatility,compared with similar clothing that the customers have purchased elsewhere means that Zara is using the Improvement value method to determine pricing. Improvement value method represents an estimate of how much more (or less) consumers are willing to pay for a product relative to other comparable products.