Refer to the scenario below to answer the following questions.
Pilot is a manufacturer of ballpoint pens, pencils, and stationery. The firm's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains. Iwao Takada, CEO of Pilot, had hoped to manufacture and sell in large enough quantities that prices could be held low. However, in the first several months, the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets.
-Why might Iwao Takada have avoided using market-skimming pricing at Pilot?
A) A high price was likely to produce more market growth.
B) It was difficult for competitors to enter the market.
C) The costs of producing a larger volume of the firm's products were too high.
D) The quality and image of the products would not have likely supported the high initial price.
E) The market for the products was not highly price sensitive.

Question

Quizplus · Accepted Answer

The scenario indicates that Pilot's primary distribution strategy is to sell in large volumes to office supply stores and large discount chains, implying that the market for the products may not be willing to pay a premium price. Additionally, the scenario states that the firm experimented with the price portion of its marketing mix in an effort to cater to a number of markets, suggesting that they were trying to find a pricing strategy that would work well across different market segments. Therefore, it is likely that Iwao Takada avoided using market-skimming pricing because the quality and image of the products would not have likely supported the high initial price.

Refer to the Scenario Below to Answer the Following Questions