When the New York Times switched to an online-paid access model for reading articles on their website,they initially felt that customers would pay $45.00 a month for unlimited access.From here,they worked backwards to ensure they were going to be profitable after paying all of the necessary IT,reporters,and administrative costs.The New York Times engaged in:
A)Penetration pricing
B)Target pricing
C)Cost-plus and percentage-of-cost pricing
D)Cost-plus and fixed fee pricing

Question

Quizplus · Accepted Answer

The New York Times engaged in target pricing by starting with a target price of $45.00 per month for unlimited access and then working backwards to determine the costs involved in order to ensure profitability. They did not engage in penetration pricing (setting a low price to gain market share), nor did they use cost-plus and percentage-of-cost pricing or cost-plus and fixed fee pricing models.

When the New York Times Switched to an Online-Paid Access