Question

A ________ market-based pricing strategy product position is one in which a business can equal competitors on all areas of product and service quality but can find one area of meaningful performance in which it is clearly superior.

A) reduce-focus

B) plus-one

C) harvest

D) multi-segment

E) penetration

Answer 1

The term 'B) plus-one' describes a market-based pricing strategy where a company equals its competitors in quality but excels in one aspect, creating a competitive advantage in a monopolistically competitive market.

Step-by-step explanation:

The correct answer to the student's question is 'B) plus-one'. A plus-one market-based pricing strategy refers to a business situation where a company can match its competitors on most aspects of product and service quality, but manages to excel in one distinct area, offering superior performance. This competitive advantage allows the company to set a price that reflects the added value of this exceptional feature or service, thereby distinguishing itself in a monopolistically competitive market.

In contrast to a perfectly competitive market, where firms have no control over prices and their products are undifferentiated, companies in monopolistically competitive markets leverage product differentiation to achieve a unique market position. Differentiation could come from various factors such as advanced features, superior customer service, brand reputation, or innovative technologies.