EBK MARKETING
6th Edition
ISBN: 9781259898884
Author: Grewal
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 14.8, Problem 1PC
Summary Introduction
To determine: The common pricing practice which is considered illegal.
Introduction: The strategy used by the companies to set the price of their products and services is known as the pricing strategy.
Expert Solution & Answer
Explanation of Solution
Even though it is always unethical to mislead in advertisements, a particular amount of puffery would be allowed. Apart from this allowed exception, there are certain points which are considered unethical; these points are explained as follows:
- Deceptive reference pricing: Deceptive reference price means where the reference prices are deflated or fictitious which might harm the consumers. This kind of reference prices is considered to be unethical or illegal.
- Loss-leader pricing: Loss-leader pricing is the tactics used by the store owners to mislead the customers. This store owners lowers the price to below store’s cost but with a markup of 100%. This type of discount does not consider to be legal in some states if the manufacturer is captivating the promotion cost of the firm.
- Bait and switch: In this strategy, sellers advertise deceptive prices without any intention to sell it. This type of strategy is also considered unethical in the country.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
How can a business' pricing decisions be affected by the government's actions?
A bait‐price item has a particularly low price and is widely advertised. Whencoming to buy the item, consumers are encouraged to buy a far more expensive item.
Why are bait‐prices considered to be unethical?
What common pricing practices are considered to beillegal or unethical?
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, marketing and related others by exploring similar questions and additional content below.Similar questions
- What are the three alternative price increase strategies?arrow_forwardUnder what environmental conditions are price wars likely to occur in an industry? What are the implications of price wars for a company?arrow_forwardExplain how unethical marketers might use bait-and-switch tactics, price-fixing, and predatory pricing.arrow_forward
- In what situations is cost-based pricing most suitable for businesses?arrow_forwardWhat might make it difficult to determine the prices of one’s competitors? When such difficulties occur, what could be done to surmount them?arrow_forwardDiscuss the advantages of fixed-price policy on the part of customer and marketer.arrow_forward
arrow_back_ios
arrow_forward_ios