If Macy's department store prices its men's ties at $10 intervals between $38 and $68, this is an example of:
A) Reference pricing
B) Price lining
C) Bundle pricing
D) Leader pricing
E) Bait pricing

Question

Quizplus · Accepted Answer

This is an example of price lining, where products are grouped and priced based on similar characteristics such as quality or features. In this case, the ties are priced based on the price interval of $10, which is a characteristic of the product. Reference pricing refers to using a higher priced product as a comparison to make a lower priced product seem like a better deal. Bundle pricing involves offering a discount for purchasing a group of products together. Leader pricing refers to offering one product at a low price to attract customers to the store. Bait pricing involves advertising a product at a very low price to attract customers, but then offering a similar but more expensive product.

If Macy's Department Store Prices Its Men's Ties at $10