Question

According to Coach's website, the company has built a distinctive style and prestigious image over the past 40 years to develop a reputation as "America's preeminent designer, producer, and marketer of fine accessories and gifts for women and men including handbags, business cases, luggage and travel accessories, wallets, outerwear, eyewear, gloves, scarves and fine jewelry." Coach employs a multi-channel distribution channel to reach its customers, including company-owned stores and boutiques in the stores of prominent specialty retailers both within the United States and abroad, and the company operates an online store. Consumers who purchase coach products are generally willing to pay the premium price due to the superior quality of Coach's products as well as the perceived prestige of owning a Coach product. Coach stresses these features in its advertising campaigns and regularly allows movies and television shows to favorably feature Coach products in appropriate scenes. Over the last five years. Coach has partnered with automobile manufacturers such as Lexus to produce automobiles with Coach interiors. In an effort to expand its international reach, Coach intends to increase its international distribution and is expanding into Japan through Coach Japan, Inc., a joint venture with a local company that will allow Coach to control international distribution and to maintain a consistent brand strategy domestically and abroad.

The price premium that customers are willing to pay for the superior quality and perceived prestige of Coach's products over the prices of similar products are known as____________.

a.marginal prices.
b.hedonic prices.
c. heroic prices.
d. elastic prices.

Answer 1

b. hedonic prices.

Step-by-step explanation:

Hedonic prices -

It refers to the method by which the combined price of the goods and services are taken , in order to measure the implicit price of the non - market goods , is referred to as hedonic prices .

The model helps to predict the quantitative values for the environmental or ecosystem services which is capable to affect the market prices for homes .

Hence , from the given scenario of the question ,

The correct answer is hedonic prices .