Question

A manager at jcpenney discovers that dillard's has reduced the price of its children's levi's from $31.99 to $24.99, according to an advertisement in the sunday newspaper. she immediately phones her store and instructs the salesperson on duty to put a sign up next to their children's levi's that reads, "sale: $24.99." this is an example of what pricing strategy?

Answer 1

Price is the value that is put into a product or service As a result of lots of calculations, research, understanding, and risk-taking. A pricing strategy, on the other hand, is the smart way a company makes in order to target and attract customers. There are four pricing strategies:

1.      Premium pricing

2.      Penetration pricing

3.      Economy pricing and

4.      Skimming pricing

Premium pricing and skimming strategy both use a high price while penetration pricing and economy pricing use a low price.

When Dillard company reduced the price of children’s Levis from $31.99 to $24.99, the used the penetration pricing. And when the manager of Jenney instructed his staff to do the same, he used the penetration pricing strategy also to attract customers.