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Pricing strategy is described as based on which two things?
AThe advertising budget and the number of sales staff
BThe tax rate applying and the wage bill of the firm
CThe market share held and the number of competitors
DThe demand for the product and the cost of producing it
Answer & Solution
Correct answer: D. The demand for the product and the cost of producing it
1. Pricing strategy rests on demand for the product and on the cost of producing it.
2. Price must also stay in balance with the other four elements of the mix.
3. A price out of balance with the rest of the mix can wreck the success of a product.
4. Advertising budgets, tax rates and rival counts influence decisions but are not the stated basis.
_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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