Question

With target costing, marketers first ________ and then ________.

A) build the marketing mix; identify the target market
B) identify target markets; set different prices for each market
C) design the product; determine its cost
D) use skimming pricing; use penetration pricing
E) determine a reasonable selling price; target costs to ensure that the price is met

Answer 1

With target costing, marketers first determine a reasonable selling price and then target costs to ensure that the price is met.

Step-by-step explanation:

With target costing, marketers first determine a reasonable selling price based on factors such as market demand, competition, and customer expectations. After determining the selling price, they then work backwards to target costs to ensure that the price is met. This involves analyzing the cost structure of the product, identifying areas where costs can be reduced, and finding ways to design the product or production process more efficiently.