Question

A 16-ounce bottle of Prairie Herb vinegar sells for $4.95, and a 16-ounce bottle of Heinz vinegar costs $1.05 . Prairie Herb vinegar is new to the market, perceived to be of higher quality, and provides a unique flavor to foods even though it is used in the same way as Heinz vinegar. Prairie Herb vinegar is most likely using a_______ policy.

a. penetration pricing
b. status quo pricing
c. price skimming
d. bundling cost pricing
e. geodemographic pricing

Answer 1

Price skimming

Step-by-step explanation:

Price skimming : It is also known as skim pricing, this is a pricing strategy in which a organization charges a high initial price and then gradually brings down the price to bait more price-sensitive customers. This strategy is mostly used when new type of product is introduced into the market.

Answer 2

Price Skimming

Step-by-step explanation:

Prairie Herb Vinegar is new to the market and using a price skimming strategy. This is where the product is sold at the highest price a certain customer base will be willing to purchase the product at. This also creates a scenario where a perception of quality is created. As the company attempts to attract more customers they will lower the price of the product hopefully expanding their existing customer base.