Question

Suppose that the watchband department of Timex sells completed watchbands to the finished watch department. The finished watch department is charged the price it would have to pay an outside watchband manufacturer less a discount to reflect low sales and transportation costs. This method of pricing is called ____ pricing.

Answer 1

Market based cost

Step-by-step explanation:

Market-based pricing is the act of setting prices that are closely aligned with the current market prices of similar products.

In this case, a business could set its prices higher at the introduction of the product, and eventually drop its price points or offer discounts later, as market interest declines.

So, the timex charges the department what they pay for other watches from different manufacturers.

Answer 2

Market-based cost.

Step-by-step explanation:

Market-based cost can be defined as a strategy to set prices according to the prices practiced by markets similar to the market in which your company operates.

Therefore, the organization will evaluate how pricing will be carried out, which will depend on whether the product will have more or less resources than similar products on the market, and then will be able to price the product as more expensive or cheaper than competing products.