![]() ![]() Customers who buy a Swiffer Sweeper will receive a small number of sweeping pads with the initial purchase. Branded products with add-ons or replacement components are another example of a value-based pricing opportunity. Because one carton of milk is essentially interchangeable with another, sellers have incentives to sell for the lowest reasonable price. A reason for this is that in a highly competitive, price-sensitive market such as milk products, the price of goods typically settles at what customers are willing to pay. Many different brands of milk are available for sale at most grocery stores, but the price across comparable products is usually quite close. Milk is a good example of a product in this category. Some products are subject to value-based pricing without being luxury goods or those with inelastic demand. In this case, buyers must consider the perceived value of a house before making an offer, as another buyer will likely swoop in if they don’t act quickly. Particularly in a seller’s market, where buyer demand is especially high, lowering the price of a home will have very little impact on the likelihood that it will sell. Many housing markets are subject to inelastic demand, meaning that demand remains high for homes regardless of whether prices are relatively lower or higher. A luxury automaker may attempt to highlight the prestige of its brand by increasing the price as a signal for how exclusive its products are. ![]() A convertible is perceived as a prestigious, luxury vehicle that draws attention in a way that traditional automobiles typically do not. ![]()
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