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Which of the following is true of single-segment pricing strategy?

A) The company does not base the price of a product on the savings that customers realize over the life of the product.

B) A single-segment pricing strategy is most likely to be employed during the decline stage of the product life-cycle.

C) A single-segment pricing strategy is a cost-based pricing strategy rather than a value-based one.

D) The main goal of single-segment pricing is to lower the cost to potential customers in order to attract their purchase volume.

E) A single-segment pricing strategy overlooks both competitor's offerings and price sensitivity.

User Tibor
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Final answer:

The correct answer is option D, which states that single-segment pricing aims to lower costs to attract purchase volume. It reflects a strategy to capture a broad customer base within a single market segment with a single price point.

Step-by-step explanation:

The single-segment pricing strategy refers to a scenario where a firm chooses to charge a single price for its product or service across a single market segment. This approach overlooks factors such as competitor's prices, cost savings over the life of the product, and customer purchasing power. Instead, it typically focuses on a simplistic pricing model, possibly in markets where differences in production costs are minimal or the firm has a well-established reputation for maintaining steady prices, or a well-respected brand name.

Given the provided information, which illustrates scenarios of price competition, and keeping in mind the nature of single-segment pricing, the answer to the student's question seems to be option D: 'The main goal of single-segment pricing is to lower the cost to potential customers in order to attract their purchase volume.' This reflects a focus on capturing a broad customer base within a single market segment by offering a price that aims to be attractive to all potential customers, rather than varying prices among different segments or in response to competitors' actions.

User Ryan Michela
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