ExpertEasy2 marksMultiple Choice
ACCA · Question 9 · Decision-making techniques
Section A
NovaTech is launching a revolutionary new virtual reality headset. The product is highly innovative, protected by patents, and aimed at early adopters who are relatively price-insensitive. The product life cycle is expected to be short due to rapid technological advancement.
Which pricing strategy is most appropriate for NovaTech's new headset?
Section A
NovaTech is launching a revolutionary new virtual reality headset. The product is highly innovative, protected by patents, and aimed at early adopters who are relatively price-insensitive. The product life cycle is expected to be short due to rapid technological advancement.
Which pricing strategy is most appropriate for NovaTech's new headset?
Answer options:
A.
Penetration pricing
B.
Market skimming
C.
Loss leader pricing
D.
Marginal cost pricing
How to approach this question
Analyze the product characteristics: innovative, patented, price-insensitive early adopters, short life cycle. Match these to the correct pricing strategy.
Full Answer
B.Market skimming✓ Correct
Market skimming is appropriate for highly innovative products with short life cycles and barriers to entry (patents). It involves charging high prices initially to maximize revenue from early adopters who are willing to pay a premium, before lowering the price as competitors enter.
Common mistakes
Confusing skimming with penetration pricing.
Practice the full ACCA PM — Performance Management Practice Exam 3
32 questions · hints · full answers · grading
More questions from this exam
Q1Section A
LogiChain is a global logistics firm that has recently migrated its entire fleet track...EasyQ2Section A
RetailX, a fast-fashion retailer, is implementing a Big Data analytics system to analy...MediumQ3Section A
EduTech Solutions is developing a new online certification course. The market research...MediumQ4Section A
BioGen is a pharmaceutical company that spends heavily on research and development (R&...EasyQ5Section A
Artisan Bakes produces a specialty sourdough bread. The bottleneck resource is the fer...Medium