When a retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store, it is practicing ________ pricing.

Question

BlackTom AI · Accepted Answer

Exploring the pricing concept in question requires matching the described tactic to its formal label.
Option 1: 'psychological' pricing. This usually involves price points designed to have a mental accounting effect (like $9.99) rather than temporary deep discounts to drive traffic. It does not specifically emphasize short-term price cuts to lure shoppers into the store, so it’s not the best fit here.
Option 2: 'geographical' pricing. This refers to charging different prices based on location, often due to transportation or market conditions, not about creating in-store excitement through short-term below-cost deals. Hence, this is not the correct description.
Option 3: 'promotional' pricing. This term covers temporary price reductions or promotions intended to stimulate demand, generate buzz, and pull customers into the store. The scenario described—pricing select items below cost to create excitement and attract foot traffic—aligns well with promotional pricing.
Option 4: 'optional-product' pricing. This describes a strategy where an anchor product is sold at a low price, with additional related items (options) priced higher, or premium add-ons offered. It does not capture the idea of temporarily pricing select items below cost to draw customers in.
Option 5: 'segmented' pricing. This involves charging different prices to different market segments based on willingness to pay or other segment characteristics, rather than a store-wide temporary discount strategy designed to generate in-store traffic.

Quiz: Ch 09 Quiz

When a retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store, it is practicing ________ pricing.

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