Question

Firms such as IKEA and The Home Depot are known for their use of __________ because they set reasonably low prices but still offer high-quality products and adequate customer services. Select one: a. prestige pricing b. value-based pricing c. market equity pricing d. relational pricing e. skimming pricing

Answer 1

Answer: (B) Value-based pricing

Step-by-step explanation:

The value-based pricing is one of the type of business strategy where the various types of companies and organization are promoting the products and the services on the basis of price and the values.

The main objective of the value based pricing is that it helps in setting the specific price of the products on the basis of the customer perceived value and this type of strategy basically focuses on the customer where the companies offering various types of exclusive offers.

According to the question, the IKEA and the home depot is one of the type of companies that basically offering the various types of value based pricing strategy. Therefore, Option (B) is correct answer.

Answer 2

b. value-based pricing

Step-by-step explanation:

Value based pricing is a pricing strategy to set price of products based on value perceived by the purchaser. To have increased profit margin, business deduces the number of benefit the product provides to consumer. Then it establishes price which takes consideration of manufacturing cost, competitive price and consumer's willingness to pay price for the goods.

In the question mentioned IKEA not only provide functional benefit for the product but also quality, design, and services at low prices hence it is an instance of value based pricing.