Question

Which of the following are issues that must be dealt with in order for differential pricing to be effective?

a) Customer loyalty
b) Market competition
c) Cost structure
d) All of the above

Answer 1

In order for differential pricing to be effective, customer loyalty, market competition, and cost structure must be dealt with. Correct option is d)

Step-by-step explanation:

In order for differential pricing to be effective, there are several issues that must be dealt with:

1. Customer loyalty: It is important to consider the impact of differential pricing on customer loyalty. If customers perceive that they are being treated unfairly or that the prices are not reasonable, they may choose to switch to a competitor.
2. Market competition: The level of competition in the market can also affect the effectiveness of differential pricing. In a highly competitive market, customers have more options and may be less likely to accept differential pricing.
3. Cost structure: The cost structure of a business is another important factor to consider. If the cost to provide a product or service varies significantly, it may make sense to implement differential pricing.

Therefore, the correct answer is d) All of the above.