Which of the following statements regarding cost-oriented approaches is most accurate?
A)These methods focus on the demand side of the pricing problem; they involve stimulating demand and decreasing revenue.
B)These methods focus on the cost side of the pricing problem; they involve considerations of production and marketing expenses.
C)Target return on investment is an example of a cost-oriented method.
D)Experience curve pricing is simple to use because costs predictably decrease by 25 percent with each doubling of production.
E)Cost-oriented approaches are subcategories of competition-oriented methods so revenues are a critical factor.

Question

Quizplus · Accepted Answer

Cost-oriented approaches focus on the cost side of the pricing problem and involve considerations of production and marketing expenses. Target return on investment is an example of a cost-oriented method. Experience curve pricing is not necessarily predictable and may vary based on the industry and company. Cost-oriented approaches are not subcategories of competition-oriented methods; they are their own category of pricing strategies.

Which of the Following Statements Regarding Cost-Oriented Approaches Is Most