The correct answer is: A. Differentiated pricing.
Differentiated pricing is a pricing strategy that adjusts the basic price to accommodate differences in customers, products, and locations. It is a common strategy used by businesses to maximize profits.
There are several reasons why businesses might choose to use differentiated pricing. One reason is that customers are willing to pay different prices for the same product or service, depending on a variety of factors, such as the quality of the product, the brand name, and the level of service. Another reason is that businesses may want to target different market segments with different prices. For example, a business might offer a lower price to students or seniors, or it might offer a higher price for a premium product.
Differentiated pricing can be a complex strategy to implement, but it can be very effective in maximizing profits. Businesses need to carefully consider the factors that will affect customer demand, as well as the costs of production and distribution, before setting prices.
Here is a brief explanation of each option:
- A. Differentiated pricing: This is a pricing strategy that adjusts the basic price to accommodate differences in customers, products, and locations.
- B. Promotional pricing: This is a pricing strategy that involves temporarily lowering prices to attract customers or to increase sales.
- C. Geographical pricing: This is a pricing strategy that involves charging different prices in different geographic locations.
- D. Price discounts and allowances: This is a pricing strategy that involves offering discounts or allowances to customers in order to encourage them to buy a product or service.