Target pricing refers to
A) a method of selecting specific prices wholesalers and retailers are willing to pay based upon the elasticity of each given item.
B) a method of charging different prices to maximize revenue for a set amount of capacity at any given time.
C) the practice of simultaneously increasing product and service benefits while maintaining or decreasing price.
D) a method of estimating the price that ultimate consumers would be willing to pay for a product, then working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers.
E) a method of determining how much wholesalers wish to charge its customers, deliberately adjusting the composition and features of the product to achieve the price to consumers.

Question

Quizplus · Accepted Answer

Target pricing is a method of estimating the price that ultimate consumers would be willing to pay for a product, then working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers. This involves setting a target cost based on the estimated price and profit margin, and then designing the product and production process to meet that cost. The focus is on meeting the price expectations of customers while ensuring profitability for the company.

Target Pricing Refers to