Question

17.- When looking at key inputs to the pricing decision, the feasible zone includes all of the following EXCEPT:

1. perceived value (PV).
2. cost of goods sold.
3. true economic value (TEV).
4. price.

18.- Many consumers are willing to pay a significantly higher price for Perdue chicken than for no-name supermarket poultry. Which general indicators of price sensitivity are illustrated by Perdue’s ability to command a high price?

Answer 1

1) when looking at key inputs to the pricing decissions the feasible zone includes all of the following except price. the perceived value, cost of goods sold and true economic value of the product is important to take pricing decissions. the price what is to be determined here and not the determinant so price is not talen.

2)Many consumers are willing to pay a significantly higher price for Perdue chicken than for no-name supermarket poultry because the quality of the chicken consumers getting from perdue must be pretty good and people recognise the firm and there loyality towards the customer. here the customers know that even if they are paying a high price they are definitly going to get good product which is why the consumer do not mind giving a few extra penny for good quality productfrom a trusted brand. if they buy the same from a non name poultry firm there are chances that they might not get the quality that they are looking for. so the brand loyaity and the truse of people gained by perdue illustrates the ability of the firm to command high price.