Question

Carmex moisture plus is priced between $2.49 and $2.99, a high price compared to the $0.99 carmex tube. carmex managers estimated that female consumers would be willing to pay more for the sleek packaging, benefits, and additional ingredients found in the moisture plus line and set the price accordingly. which demand-oriented approach is best reflected in the price of the moisture plus line?

Answer 1

Carmex is using the Target Pricing strategy in order to be able to keep an higher price and yet having the desirable amount of sales. This strategy has three key points: 1) identifying the price at which a product will still be competitive 2) defining the profit to be made when selling the product, based on what demography is willing to buy 3) Finding the target price with the data previously found