Question

Adibas desires 5 Adibas desires to establish retail selling price for its new skateboard on the basis of Perceived Value. The average market price for this item is $15.00. Consumers, when asked to allocate 100 points among Adibas and four other competitors, gave Adibas an average of 24 points. Your recommended PV-based Adibas retail price?

a. $12.50
b. $11.25
c. none of (a-d) above fits the PV criterion
d. $18.00
e. $10.25

Answer 1

Adibas's perceived value-based retail selling price should be $11.40, calculated from the allocation of 24 points out of 100 compared to the $15 average market price, which leads to the conclusion that none of the provided options (a-d) fits the perceived value criterion.

Step-by-step explanation:

The concept of perceived value-based pricing assumes that consumers will pay for the value they perceive in a good or service. In this case, Adibas received an average of 24 points out of 100 from consumers, in comparison to its four competitors. With this information, we can determine the perceived value price by calculating the proportion of perceived value points relative to the average market price. This results in a calculation where 24/100 is multiplied by the average market price of $15.00, which equals $3.60. Therefore, based on the perceived value, Adibas could set its retail selling price at $3.60 less than the average market price, putting the price at $11.40, which isn't one of the provided options.

Since $11.40 is not one of the given choices, the correct response, based on the perceived value criterion, would be none of (a-d) above fits the PV criterion.