Question

When would the customer be willing to pay a premium price for a product or service?...

When would the customer be willing to pay a premium price for a product or service? What pricing strategy would be appropriate under these circumstances?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A customer is willing to pay a premium price when they have a perception that an expensive product means higher quality, are more reliable or desirable or are more popular than other products. Customers are also willing to pay more for current trends. Customers are also ready to pay more for a product that is exclusive or distinct or has unique properties one of kind product.

Premium pricing strategy is appropriate under such circumstances. Under premium pricing the price of the product is kept high artificially in order to create favorable perception in the minds of the buyers. Premium pricing is used while introducing new product wo creat a kind of perceprion for the product in the minds of the buyers.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Willingness to pay 1. measures the maximum price a buyer is willing to pay minus the...
Willingness to pay 1. measures the maximum price a buyer is willing to pay minus the minimum price a seller is willing to accept. 2. the maximum price that a buyer is willing to pay for a good. 3.the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept for the good. 4.the maximum price a buyer is willing to pay for a product minus the amount the buyer actually pays for...
Which is a key performance indicator for a customer-centric marketing approach? Market share Customer penetration Price...
Which is a key performance indicator for a customer-centric marketing approach? Market share Customer penetration Price premium Customer lifetime value The most important element to a customer-centric marketing strategy is… Having knowledgeable sales staff. Fostering good relationships through customer service. Having useful data from your customers. Having the best product on the market. 3. A customer-centric approach to marketing can best be characterized as… An approach that seeks to make the product being sold as valuable as possible to consumers....
Write a marketing strategy for a indoor sports complex that should outline your strategies for product/service...
Write a marketing strategy for a indoor sports complex that should outline your strategies for product/service mix, pricing, promotion, place/location, and positioning. 1. Product/Service Strategy – what mix of products and services will you sell and how does that best meet customer needs and how does it compare to your competitors. 2. Pricing Strategy – how will you price your products/services relative to competitors, and what impact will that have on your volume of sales. 3. Place/Location Strategy – how...
What would you be willing to pay today for an asset that will generate a cash...
What would you be willing to pay today for an asset that will generate a cash flow of $500 in year 6 and then continues to grow forever at 3% if the appropriate discount rate is 11%?
If a product has a low marginal utility, then A consumer is willing to pay a...
If a product has a low marginal utility, then A consumer is willing to pay a lower price for it. The demand curve will be downward-sloping. Consumers will not purchase any more of the good. Consumers will also have a low total utility.
When consumers are willing to buy less than producers are willing to sell: A. there is...
When consumers are willing to buy less than producers are willing to sell: A. there is excess supply of the product in the market and the price will fall. B. there is excess demand for the product in the market and price will rise. C. there is excess supply of the product in the market and the price will rise. D. there is excess demand for the product in the market and price will fall. Assume that farmers can use...
When would a firm choose to operate on a transnational basis? Under what circumstances would a...
When would a firm choose to operate on a transnational basis? Under what circumstances would a firm use a localization strategy? When would an International strategy be employed? When would a firm operation a global standardization strategy? Support your answers with examples.
Your company sells two products, product A and product B. You have two potential customers, Customer...
Your company sells two products, product A and product B. You have two potential customers, Customer 1 and Customer 2. They will both either buy 0 or 1 units of each product. Their willingnesses to pay for each product are given by the table below: Customer 1 Customer 2 Product A $10 $7 Product B $12 X a. Suppose that X is $14. Does it make sense for you to sell your products as a bundle or to sell them...
Suppose that technophiles are willing to pay $400 now for the latest iPhone, but only $300...
Suppose that technophiles are willing to pay $400 now for the latest iPhone, but only $300 if they have to wait a year. Normal people are willing to pay $250, and their desire to purchase does not vary with time. There are only two time periods and ignore the time value of money and compute the optimal pricing scheme of the iPhone. Assume that there are equal numbers of each customer type, and that the MC of the iPhone is...
Your company sells two products, product A and product B. You have two potential customers, Customer...
Your company sells two products, product A and product B. You have two potential customers, Customer 1 and Customer 2. They will both either buy 0 or 1 units of each product. Their willingnesses to pay for each product are given by the table below: Customer 1 Customer 2 Product A $10 $7 Product B $12 X a. Suppose that X is $14. Does it make sense for you to sell your products as a bundle or to sell them...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT