Scenario: Scooters Inc. Scooters Inc. is a producer of pricey scooters. The company's profits come mostly from the sales of its luxury line that caters to the esteem needs of the rich population. Ben Driven, vice president of marketing for Scooters Inc., has been asked to review the company's pricing strategy. Scooters Inc. has traditionally sold its products at one price in the domestic market and at another price in export markets, which is called a(n) ________ pricing strategy

Scenario: Scooters Inc. Scooters Inc. is a producer of pricey scooters. The company's profits come mostly from the sales of its luxury line that caters to the esteem needs of the rich population. Ben Driven, vice president of marketing for Scooters Inc., has been asked to review the company's pricing strategy. Scooters Inc. has traditionally sold its products at one price in the domestic market and at another price in export markets, which is called a ________ pricing strategy

A) dual

B) cost-plus

C) penetration

D) premium

Answer:

The Answer is A) Dual Pricing Strategy

Explanation:

Dual pricing is the strategy of fixing different prices in different markets for the same product or service.

Many business may do this for a number of reasons such as:

to aggressively take market share away from competitors.
financial and tax reasons for pricing differently. For example, Harsh currency exchange rates may make it harder to sell into a market, so the company must raise prices to offset these costs of doing business.
Different Distribution costs. Cost of distribution may be different in each market. For example, distributors must be used in one market to channel goods to consumers, while sales can be direct to consumers in another market. Each model will generate different margins, unless prices are changed to generate a uniform margin across all markets.
Demand based pricing. This is basic economics where the price is determined by how high or low the demand for the product or service is.

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