In order to set prices for new products, firms should __.

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When evaluating how firms should set prices for new products, it helps to map each option to common pricing strategies and their typical implications.
Option 1: 'Be cautious when using price skimming strategy if they don’t want to upset their previous, loyal customers.' Price skimming starts with a high price to capture early adopters and recover development costs, but over time it can irritate loyal customers who expect fairness or lower prices as the product matures. Therefore, exercising caution to avoid alienating existing customers is a reasonable consideration when deploying price skimming.
Option 2: 'Use penetration pricing strategy if they want to ease the burden on capacity.' Penetration pricing sets a low initial price to quickly gain market share and expand demand, which can help utilize capacity. However, the phrase 'ease the burden on capacity' is a bit odd; penetration pricing is more about broad adoption and volume rather than directly reducing capacity strain, though increased demand can influence capacity planning. The core idea aligns less directly with capacity easing than with market entry and growth, so this option is less precise.
Option 3: 'Avoid to use pricing skimming strategy if their focal products are related to wearable technology.' The subject here implies a constraint based on product category. Wearable technology does not inherently preclude price skimming; the decision depends on brand, competition, and consumer sensitivity, not strictly on the technology category. Therefore this blanket statement is not inherently correct.
Option 4: 'Use penetration pricing strategy if they don’t want to leave money on the table.' This misstates the typical trade-off. Penetration pricing sacrifices higher per-unit margins upfront to gain volume, which is often contrary to the goal of not leaving money on the table. While volume can lead to long-term gains, the wording suggests a certainty about not leaving money on the table, which is not a universal outcome of penetration pricing.
In summary, each option links pricing strategy to a particular objective or concern, but the most coherent and contextually accurate claim among them is that price skimming should be used with caution to avoid upsetting loyal customers, since initial high prices can create backlash among existing customers who expect fair treatment or lower future prices. The other options either rely on less precise causal connections (capacity easing from penetration pricing), rely on a category-based claim that isn’t inherently true (wearable tech), or misstate the typical outcome of a given pricing approach (not leaving money on the table with penetration pricing).

MKTG1021.07|.08|.09 Fall 2025 Marketing Principles [Wang] MKTG1021-Final Exam- Requires Respondus LockDown Browser

In order to set prices for new products, firms should __.

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