The pricing approach that results in the manufacturer deliberately adjusting the composition and features of the product to achieve a calculated price for consumers is referred to as
A) cost-benefit pricing.
B) cost-plus-percentage-of-cost pricing.
C) target pricing.
D) cost-plus-fixed-fee pricing.
E) product feature pricing.

Question

Quizplus · Accepted Answer

Target pricing involves setting the price of the product based on the desired profit margin, and then adjusting the product features and composition to achieve that price. This approach is commonly used in competitive markets where pricing is critical, and allows manufacturers to design products that are optimized for the target price point. Cost-benefit pricing and cost-plus-percentage-of-cost pricing are pricing approaches that are based on the manufacturer's costs and desired profit margin, but do not involve adjusting the product features or composition to achieve a specific price point. Cost-plus-fixed-fee pricing is a pricing approach that is commonly used in government contracts, where the manufacturer is reimbursed for their costs plus a fixed fee. Product feature pricing is not a commonly recognized pricing approach.

The Pricing Approach That Results in the Manufacturer Deliberately Adjusting