Question

Dhruv is shopping at men's wearhouse for a new suit. the salesperson shows him that there are basically three levels of quality based on the material and wool content. the top-of-the line suits retail for $1500 each and are ordered according to the customer's measurements. the medium-level suits retail for $750 each, and the base level suits are $450 each. men's wearhouse is using a _____ pricing approach.

a. bait pricing
b. flexible pricing
c. price lining
d. price bundling

Answer 1

Men's Wearhouse uses a price lining approach by offering suits at three different price points ($1500, $750, $450), catering to customers with different budgets and needs.

Step-by-step explanation:

Men's Wearhouse is using a price lining pricing approach by offering suits at three distinct price points. This strategy groups products based on cost and quality differences, meeting the needs of different market segments. The top-of-the-line suits are premium, made-to-measure offerings at $1500, while the medium-level and base level suits are priced at $750 and $450, providing options for customers with varying budgets.

In the context of the question, bait pricing, flexible pricing, and price bundling do not accurately describe Men's Wearhouse's pricing strategy. Bait pricing would imply offering a product at a low price to lure customers and then pressuring them to purchase more expensive items. Flexible pricing would denote varying prices for different customers or situations. Finally, price bundling would mean selling multiple products for a single price.