Question:
One of the factors affecting price determination of a product is ‘Pricing Objectives’. Which of the following pricing objectives will result in a higher price being fixed for the product ?
One of the factors affecting price determination of a product is ‘Pricing Objectives’. Which of the following pricing objectives will result in a higher price being fixed for the product ?
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High Quality = High Cost = High Price. Think of brands like Apple or Rolex; their objective is quality leadership, which demands a premium price.
Updated On: Mar 29, 2026
- Obtaining market share leadership
- Surviving in a competitive market
- Attaining product quality leadership
- Profit maximisation in the long run
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The Correct Option is C
Solution and Explanation
Step 1: Understanding the Concept:
Pricing objectives dictate how a company sets its prices. Objectives like "survival" or "market share" usually require lower prices to attract volume, whereas "quality leadership" focuses on perceived value.
Step 2: Detailed Explanation:
To attain "Product Quality Leadership," a firm must invest heavily in R & D and high-quality materials. To cover these costs and signal to customers that the product is "premium" or the "best in class," the company must charge a higher price.
Step 3: Final Answer:
The objective resulting in higher prices is (C).
Pricing objectives dictate how a company sets its prices. Objectives like "survival" or "market share" usually require lower prices to attract volume, whereas "quality leadership" focuses on perceived value.
Step 2: Detailed Explanation:
To attain "Product Quality Leadership," a firm must invest heavily in R & D and high-quality materials. To cover these costs and signal to customers that the product is "premium" or the "best in class," the company must charge a higher price.
Step 3: Final Answer:
The objective resulting in higher prices is (C).
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