Why is price lining a valuable tactic for marketing managers?
A)Price lining results in a greater inventory carrying charge.
B)A company that uses price lining is able to carry a smaller total inventory and reduce confusion for its customers.
C)A company that uses price lining has more price markdowns and greater markup.
D)The price lining strategy allows the company to gain brand loyalty from its targeted segments.

Question

Quizplus · Accepted Answer

Price lining helps marketing managers to simplify their pricing strategy and reduce confusion for the customers. This means the company can carry a smaller inventory and still tap into different customer segments with varying price sensitivities. This can lead to higher sales, reduced inventory carrying cost, and improved customer loyalty. Options A and C are incorrect; price lining is not associated with greater inventory carrying charge, markdowns, or markup. Option D is partially correct but not the best choice, as the price lining strategy is more about pricing than brand loyalty.

Why Is Price Lining a Valuable Tactic for Marketing Managers