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)Cost-plus and percentage-of-cost pricing
B)Target pricing
C)Cost-plus and fixed fee pricing
D)Penetration pricing

Question

Quizplus · Accepted Answer

The New York Times used target pricing by setting the desired price of $45.00 per month for unlimited online access and then working backwards to ensure they could cover all their costs and be profitable. This approach considers the desired price first and then determines the cost structure needed to support it.

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