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Two products are identical except that one carries a well known designer name. What does that name do to the price?
AIt has no effect at all on the price the product fetches
BIt lowers the price because the buyer pays for the name
CIt raises the price above the identical unnamed product
DIt fixes the price at the cost of producing the product
Answer & Solution
Correct answer: C. It raises the price above the identical unnamed product
1. Marketers view a product as more than the item itself.
2. The brand name and the company image are part of the product too.
3. Designer names create extra value across items from cosmetics to bath towels.
4. Products carrying those names sell at higher prices than identical products without them.
5. Consumers buy things not only for what they do but also for what they mean.
6. So the name lifts the price rather than leaving it unchanged, lowering it or fixing it at cost.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 11 "Creating Products and Pricing Strategies to Meet Customers' Needs", section 11.3 Developing a Marketing Mix_
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