What was company X’s strategy with the original model B—product differentiation, low cost, or focus? Which strategy did the company implement with its new model? Explain your answers.
Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
Company X is an automobile manufacturer. Until the 1970s, the company produced
model B that was made of inexpensive material. The company was using mass production
technology which is considered an efficient one. The options in model B were limited.
The company revamped in 1990s and introduced model B in a new form. The new model
was available with more features, had distinctive style, and priced for upscale buyers.
What was company X’s strategy with the original model B—product differentiation, low
cost, or focus? Which strategy did the company implement with its new model? Explain
your answers.
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