Question

. What kind of pricing strategy should be used for each product? a. New Video on-demand...

. What kind of pricing strategy should be used for each product?

a. New Video on-demand subscription service b. Milka chocolate with new taste

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Answer #1

(a) New video on demand subscription service refers to new product launched in the market. In order to have wide reach of this product penetration pricing strategy is used in which low price is set in order to gain more and more sales in the market.

(b) Milka chocolate with new taste refers to product in oligopolistic environment due to few firms selling chocolates which induces firm to set price of dominant leader in the market. This strategy is called following pricing strategy. This strategy is used only when there is oligopolistic environment exists.

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