Question

If a firm is able to create a premium image in its customer's mind by offering a custom product or extra service, it should typically claim _____ as its pricing strategy and use it as a differential advantage.

A. Loss leader.
B. Penetration pricing.
C. Going rate.
D. Prestige pricing.

Answer 1

If a firm is able to create a premium image in its customer's mind by offering a custom product or extra service, it should typically claim Prestige pricing as its pricing strategy and use it as a differential advantage.

Step-by-step explanation:

If a firm is able to create a premium image in its customer's mind by offering a custom product or extra service, it should typically claim Prestige pricing as its pricing strategy and use it as a differential advantage.

Prestige pricing is a strategy where a firm sets a high price for its product to create the perception of exclusivity and quality. By offering a custom product or extra service, the firm enhances the perceived value of the product, allowing them to justify the higher price tag. This strategy is used to differentiate the firm from its competitors and attract customers who are willing to pay a premium price for the perceived prestige.