Motivating consumers by reducing a product's price can be a problem because:
A) although sales may increase, profits may not
B) it tends to attract less loyal consumers
C) it can enhance the price sensitivity of both loyal and nonloyal consumers
D) A and B
E) A, B, and C

Question

Quizplus · Accepted Answer

Reducing a product's price can indeed increase sales but may not proportionally increase profits due to the reduced margin per unit sold. It also tends to attract less loyal consumers who are primarily motivated by price and may switch brands for better deals. Furthermore, frequent price reductions can train consumers to be more price-sensitive, affecting both loyal and nonloyal customers' purchasing behaviors.

Motivating Consumers by Reducing a Product's Price Can Be a Problem