Scenario 20.1 Use the following to answer the questions.
Suppose that Ray-Ban is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical glasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Ray-Ban lines that are sold through more selective stores. In determining the price for this sunglass line, Ray-Ban wants to gather information about all brands sold in department stores and about customers' perceptions of those brands.
Refer to Scenario 20.1. Ray-Ban's plan of gathering information about the other brands sold in department stores, including their prices, would most likely be used in a ____ basis for pricing.
A) cost
B) competition
C) demand
D) customer
E) market

Question

Quizplus · Accepted Answer

Ray-Ban is gathering information about all brands sold in department stores and about customers' perceptions of those brands. This indicates that Ray-Ban is using a competition-based pricing strategy by pricing the new sunglasses line higher than other brands but lower than its own selective store lines.