Question

Starbucks employs value-based pricing to maximize profits. Starbucks uses research and customer analysis to formulate targeted price increases that capture the greatest amount consumers are willing to pay. Which of the following statements is true of value-based pricing? a. It presents drawbacks if costs are continually rising. b. It is a modification of uniform delivered pricing.

c. It is sometimes called postage stamp pricing. d. It seeks to understand the attributes customers want.

Answer 1

The correct answer is: d. It seeks to understand the attributes customers want.

Step-by-step explanation:

Value-based pricing is a pricing strategy that sets prices based on the perceived value of the product or service to the customer. This means that businesses must first understand what customers value and then price their products or services accordingly.

One way to do this is to conduct market research to understand what customers are willing to pay for different features or benefits. Businesses can also use customer surveys or focus groups to get feedback on their pricing strategy.

Value-based pricing can be a very effective way to maximize profits. However, it is important to note that it can be difficult to implement. Businesses must have a good understanding of their customers and their needs in order to set prices that are both fair and profitable.

The other options are incorrect. Value-based pricing is not a modification of uniform delivered pricing, nor is it sometimes called postage stamp pricing. It also does not present drawbacks if costs are continually rising. In fact, value-based pricing can be a very effective way to maximize profits even in times of rising costs.