Refer to the scenario below to answer the following questions.
Quills,Inc.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.Charles Powell,CEO of Quills,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 have Charles Powell have avoided using market- skimming pricing at Quills?
A)The quality and image of the products would not have likely supported the high initial price.
B)The costs of producing a larger volume of the firm's products were too high.
C)It was difficult for competitors to enter the market.
D)A high price was likely to produce more market growth.
E)The market for the products was not highly price sensitive.

Question

Quizplus · Accepted Answer

The scenario states that Quills aimed to cater to a number of markets and experiment with the price portion of its marketing mix. This indicates that the company wanted to keep its prices competitive to appeal to a wider range of customers. Market-skimming pricing involves setting a high initial price for a product and gradually reducing it over time, which may not have been a suitable strategy for Quills if the quality and image of its products did not support such a high price. Therefore, A is the best choice.

Refer to the Scenario Below to Answer the Following Questions