Macy's, Kohl's, and JCPenney practice a retailing pricing strategy called "high-low pricing." Which of the following correctly describes high-low pricing?

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Macy's, Kohl's, and JCPenney practice a retailing pricing strategy called "high-low pricing." Which of the following correctly describes high-low pricing?
Option 1: 'Retailers charge an everyday low price with no special promotions.' This describes a everyday low pricing (EDLP) approach, not high-low pricing, so it does not match the high-low strategy.
Option 2: 'Some products are priced high, others are priced low, and still others are priced at bargain-basement levels.' While this seems to reflect a tiered pricing structure, it does not capture the core mechanism of high-low pricing, which emphasizes regular promotions rather than static mixed levels.
Option 3: 'The retailer charges higher prices on an everyday basis, coupled with frequent sales and other price promotions.' This aligns with high-low pricing: everyday prices are relatively high, but frequent promotions create perceived value and stimulate demand through sales events.
Option 4: 'Retailers do not have to use promotions.' This contradicts high-low pricing, which relies on promotional events to drive traffic and sales, so it is incorrect.
Option 5: 'The retailer does not have to run sales on selected items.' High-low pricing typically involves sales and promotions on various items to attract customers, so this statement is inconsistent with the strategy.
Overall, understanding high-low pricing hinges on the combination of higher everyday prices with regular promotional events that create a sense of deal-seeking among shoppers, which is reflected in option 3.

Test: Exam 3

Macy's, Kohl's, and JCPenney practice a retailing pricing strategy called "high-low pricing." Which of the following correctly describes high-low pricing?

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