৪৯তম বিসিএস ⎯ মার্কেটিং [৭২১]

Texts summarize three broad pricing approaches: value-based (starting from buyer value), cost-based (starting from costs), and competition-based (considering rivals). These are the foundations under which specific strategies (e.g., product mix, adjustments) are chosen. 

A  matches the canonical trio; B are tactics under other headings (new-product or mix); C are price-adjustment tactics; D confuses 3Ps with pricing.

Reference: Principles of Marketing, Philip Kotler, Ch-9

Penetration pricing succeeds when demand is price-sensitive, unit costs decline with scale, and the firm can maintain the low price to deter entry; otherwise, the advantage is temporary.

 B states the textbook conditions; A reverses cost behavior; C/D align more with skimming or scarcity, not penetration.

Reference: Principles of Marketing, Philip Kotler, Ch-9

Product line pricing involves setting price steps between items within a line, reflecting cost differences, the perceived value of features, and competitor prices. 

A matches “price steps”; B are add-ons with the main product; C are must-use complements (e.g., cartridges); D sells multiple items at one combo price.

Reference: Principles of Marketing, Philip Kotler, Ch-9

Optional-product pricing prices accessories or add-ons alongside a core offering (e.g., car navigation, hotel add-ons, airline ancillaries). The firm determines what is included in the base and what’s offered as options.

A  fits ancillary fees; B would be must-use items; C is a single combo price; D concerns pricing low-value by-products.

Reference: Principles of Marketing, Philip Kotler, Ch-10

Captive-product pricing refers to products that must be used in conjunction with the core (e.g., blades for razors, game cartridges). It can trigger resentment if customers feel they are being “trapped.” For services, the analogue is two-part pricing (fixed fee + usage). 

B  captures “must-use” and two-part pricing; A is optional-product pricing; C is not guaranteed—backlash is possible; D is different (bundling = one reduced combo price).

Reference: Principles of Marketing, Philip Kotler, Ch-10

By-product pricing finds a market for low-value by-products, helping to offset disposal costs and making the main product’s price more competitive.

A is a textbook; B concerns price steps within a line; C charges different prices by customer/time/form; D is temporary discounting.

Reference: Principles of Marketing, Philip Kotler, Ch-10

Product bundle pricing combines multiple products, offering a reduced combined price to increase perceived value and encourage the purchase of linked items.

A matches the “combo”; B are add-ons priced separately; C are must-use complements; D is about price-quality cues (e.g., 999 vs 1000).

Reference: Principles of Marketing, Philip Kotler, Ch-10

Price adjustment strategies include segmented, psychological, promotional, geographical, dynamic, and online. Product line pricing is a product-mix strategy, not an adjustment tactic. 

A/B/D are named adjustment strategies; C belongs to the product-mix set.

Reference: Principles of Marketing, Philip Kotler, Ch-10

Geographical pricing refers to the method by which sellers determine prices for distant customers—common alternatives include FOB-origin, uniform-delivered, zone, basing-point, and freight-absorption pricing.

A  lists the recognized forms; B are new-product/positioning labels; C are discount/allowance types; D are psychological pricing cues.

Reference: Principles of Marketing, Philip Kotler, Ch-10

When responding to competitors’ price cuts, firms assess the intent, duration, and impact, and may reduce their price, raise perceived value, improve quality, raise prices, or launch a fighting brand—all pre-planned in a response playbook.

A is explicitly listed; B could be risky without analysis; C may be inappropriate absent evidence; D harms competitiveness rather than addressing the price move.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Cost-plus (markup) pricing sets the price by adding a fixed percentage or amount to the unit cost. It’s simple, perceived as “fair,” and useful when demand is hard to forecast. Weakness: it ignores customer value and competitor reactions; if costs are bloated, price will be too.

A matches “cost + standard markup”; B starts from buyer value, not cost; C pegs price to competitors; D constantly changes with demand/supply data.

Reference: Principles of Marketing, Philip Kotler, Ch-10

Good-value pricing finds the optimal balance of quality, service, and price—sometimes achieved through EDLP or carefully designed bundles. Value-added pricing adds features/experiences to differentiate and support a higher price, rather than discounting.

B aligns with definitions; A reverses them; C reduces “good-value” to EDLP only (too narrow) and mislabels “value-added”; D is unrelated (skimming is a new-product strategy).

Reference: Principles of Marketing, Philip Kotler, Ch-10

In sealed-bid pricing, firms set prices with an eye to winning the contract, often by undercutting anticipated rival bids. It’s competition-based, not cost- or value-first.

A matches tender logic; B ignores rivals; C/D relate to consumer price perceptions, not competitive tenders.

Reference: Principles of Marketing, Philip Kotler, Ch-11

With elastic demand (|E| > 1), a small price cut results in a proportionately larger increase in quantity demanded, thereby increasing total revenue. For inelastic goods, the opposite tends to hold.

B fits elasticity math; A/D reduces revenue for elastic demand; C forfeits the opportunity.

Reference: Principles of Marketing, Philip Kotler, Ch-10

Skimming sets a high initial price to “skim” layers of buyers willing to pay more. It works when the product is distinctive, demand is inelastic, and imitation/entry is slow, allowing the firm to harvest margins before lowering prices to broader segments.

B states core conditions; A better suits penetration; C undermines pricing power; D is not decisive for skimming success.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Odd–even (charm) pricing uses just-below thresholds (e.g., 999) to accent value. Prestige pricing often uses rounded, higher anchors (e.g., 1,000) to signal quality.

A matches the cue; B would prefer rounded highs; C/D are unrelated.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Segmented (discriminatory) pricing charges different prices to customer segments, product forms, locations, or times, even when costs are similar, provided it’s legal, transparent, and fair (no illegal discrimination or deception) and reflects differences in perceived value.

B captures legality + value logic; A is too strict; C ignores time/customer segmentation; D overlaps in practice but is not identical (dynamic uses real-time demand data).

Reference: Principles of Marketing, Philip Kotler, Ch-11

Dynamic (yield) pricing varies prices continuously based on real-time demand, capacity, and contextual factors (such as weather and traffic). It aims to allocate scarce capacity efficiently and balance demand and supply, but must also manage perceptions of fairness.

B fits surge logic; A is temporary discounting; C is about paid add-ons; D is a high initial price for new products.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Before cutting price, firms should analyze: Is the rival clearing inventory, seeking share leadership, or signaling a new equilibrium? How elastic is demand? What’s our cost/brand strength? Based on diagnosis, responses include holding the price, adding value, temporary promotions, selective cuts, improved quality, or a fighting brand. Knee-jerk matching can start a value-destroying price war.

B enforces disciplined diagnosis; A may be necessary later but not first; C weakens demand generation; D is premature without evidence.

Reference: Principles of Marketing, Philip Kotler, Ch-11

- Common discounts/allowances include cash (early payment), quantity (volume), seasonal (off-peak), and functional/trade (channel services). They adjust the list price to reward desired behaviors without permanently lowering the brand’s reference price.
- A lists classic types; B are positioning/new-product labels; C are geographical pricing forms; D are psychological price cues.

Reference: Principles of Marketing, Philip Kotler, Ch-11

- Break-even/target-profit pricing starts from cost and volume. Managers compute the price–quantity combination that covers total cost (break-even) or achieves a target ROI/profit. It’s simple and financeable, but risky if it ignores demand sensitivity and competitive reactions; the computed “answer” is only viable if customers accept it.

- B matches CVP logic; A begins with buyer value, not CVP math; C pegs to competitors’ going price; D is a high initial price for new products, not a CVP tool.

Reference: Principles of Marketing, Philip Kotler, Ch-10

Buyers compare current prices with reference prices (memory of past prices, competitor tags, list prices). Tactics like Tk 999 or framing (“was Tk 1,200, now 999”) work by shifting/activating these references. Shifts can be either sticky or temporary, depending on the frequency and credibility of promotions.

A captures internal/external reference; B is too narrow; C is false—odd–even cues matter; D overstates permanence.

Reference: Principles of Marketing, Philip Kotler, Ch-11

EDLP offers a stable, trustworthy, low price, reducing search and inventory costs. High–Low keeps higher list prices but runs periodic deep deals to drive traffic and price excitement. Retailers choose based on category, competition, and brand promise.

B is textbook; A swaps the definitions; C mislabels; D is incorrect—strategies differ in price path and perception.

Reference: Principles of Marketing, Philip Kotler, Ch-10

Captive complements (e.g., proprietary ink) often face few substitutes and high switching costs, resulting in lower price elasticity and supporting higher margins. However, firms must manage perceptions of fairness to avoid backlash or regulatory attention.

B matches captive-product logic; A/C/D are highly comparable with many substitutes → more elastic.

Reference: Principles of Marketing, Philip Kotler, Ch-10

- Cut price only when (1) demand is elastic enough to lift volume and revenue, (2) you have sustainable cost advantages (scale, process, experience effects), and (3) the move won’t trigger a spiral of matching cuts. Otherwise, prefer adding value, selective promos, or differentiation.

- A states the economic and strategic preconditions; B suggests value defense, not cutting; C demands diagnosis first, not action; D is a goal, not a condition—cutting can actually cause a war.

Reference: Principles of Marketing, Philip Kotler, Ch-11

- In freight absorption, the seller absorbs some/all freight to penetrate distant markets or meet a geo-based price match, thereby narrowing delivered price gaps versus nearer rivals.
B matches the description; A makes the buyer pay freight from the seller’s location; C offers the same delivered price to all zones; D uses a designated “base” city to compute freight.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Going-rate pricing benchmarks the prevailing market price, common where products are standardized and price transparency is high; it minimizes price wars and signals conformity.
A fits leader-following; B adds markup to the cost; C and D are unrelated here.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Target costing works backward from customer value and the acceptable market price to compute the allowable cost. Cross-functional teams then engineer the product/process to meet that cost while delivering the promised benefits. It aligns offers with willingness-to-pay and avoids over-engineering.

B is the classic definition; A is cost-plus; C is going-rate; D is irrelevant to value-based design.

Reference: Principles of Marketing, Philip Kotler, Ch-10

With a steep learning/experience curve, an aggressive low price can accelerate cumulative output, dropping unit costs faster and erecting a cost barrier to entrants. Success requires access to capital, capacity, and credible commitment; absent these, the tactic can backfire.

A exploits learning economies; B harvests margin but slows learning; C is orthogonal; D abdicates strategy.

Reference: Principles of Marketing, Philip Kotler, Ch-10

Prestige (image) pricing sets higher prices to reinforce perceptions of quality, status, or scarcity; brands often prefer rounded numbers to emphasize “whole” value rather than bargains. It works when the category supports price–quality inference and brand equity is strong.

A (captures signaling; B confuses it with charm pricing; C necessity goods rarely need prestige cues; D is false, premium margins can offset lower volume.

Reference: Principles of Marketing, Philip Kotler, Ch-11

“Was–Now” framing activates or resets the buyer’s internal/external reference price, making the current price seem like a deal. Lining organizes steps, basing points are geographic, and a two-part tariff splits fixed/usage fees—none directly reframes the reference price like A does.

A targets reference-price perception; B creates product steps, not a reference shift; C relates to freight computation; D is a structure of charges, not a framing device.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Elasticity –1.5 ⇒ quantity ↑ by 15% for a 10% price cut. Revenue ≈ P×Q = 0.9 × 1.15 = 1.035, i.e., +3.5%. Because |E|>1, the quantity gain more than offsets the lower price.

B matches the math; A would imply |E|<1; C ignores elasticity; D confuses quantity change with revenue change.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Successful segmented pricing requires (1) heterogeneous willingness-to-pay, (2) enforceable fences (time, form, booking rules) to prevent arbitrage, (3) value-based justification rather than protected-class discrimination, and (4) compliance with consumer-protection/anti-discrimination laws.

B states core conditions; A is illegal/unethical; C is unnecessary—costs may be similar; D invites backlash and legal risk.

Reference: Principles of Marketing, Philip Kotler, Ch-11

With network effects, early scale is critical. Penetration pricing accelerates adoption on both sides (users/restaurants), improving liquidity and defensibility; skimming slows network growth.

B fits network growth; A risks slow adoption; C mismatches the utilitarian platform; D is orthogonal to the entry strategy.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Price lining builds distinct tiers with meaningful feature-value differences, allowing customers to self-select. Fences and gaps reduce cannibalization and nudge customers toward upgrades.

B captures steps + control; A defeats differentiation; C is bundling, not lining; D is a pricing tactic unrelated to line architecture.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Two-part pricing splits charges into a fixed fee (entry/membership) and a variable usage fee, common in services/utilities to balance access and usage incentives.

A matches structure; B is must-use complements (e.g., cartridges); C sells multiple items at one price; D is perception cues.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Uniform-delivered sets the same delivered price for all buyers; FOB makes buyers pay freight from the origin; zone pricing sets prices by region; freight absorption means the seller pays part/all of the freight selectively.

A matches “same delivered price”; B/C/D don’t.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Playbooks recommend diagnosing first, then implementing targeted moves: defending value, selective price actions, versioning/fighter brands, or quality–price repositioning. A blanket permanent cut risks a price war and erosion of profits.

C is the reckless option; A, B, and D are documented strategic responses when conditions are favorable.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Predatory pricing involves an intent to engage in below-cost pricing over time to eliminate competition and later recoup losses, distinct from competitive pricing, legal segmentation, or short-term clearances without exclusionary intent.

B captures both below-cost and intent/recoup; A is routine rivalry; C is segmented pricing; D lacks the exclusionary pattern.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Best practice is to explain cost drivers (e.g., input inflation) and/or enhance benefits (such as pack upgrades and warranties) so that the higher price feels fair. Hidden shrinkflation, nuisance fees, or quality cuts erode trust and brand equity.

C manages perceptions and value; A/B reduces trust; D damages the proposition and invites churn.

Reference: Principles of Marketing, Philip Kotler, Ch-11

- Product-form pricing charges different prices for different versions/forms of the same core product (e.g., SD/HD/4K streams), even when cost differences are small, because segments value the forms differently.

- option A classic form-based segmentation; B = captive-product pricing; C = odd–even psychological cue; D = uniform-delivered (geographical).

Reference: Principles of Marketing, Philip Kotler, Ch-11

Zone pricing sets a single delivered price per region/zone; customers in the same zone pay the same, while customers in different zones pay different amounts.

A  matches the setup; B would charge one price nationwide; C makes the buyer pay freight from the origin; D computes freight from a chosen base city.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Textbook pricing integrates value (ceiling), costs (floor), competition/market context, and alignment with the firm’s strategy/mix, under legal/ethical limits.

A comprehensive; B ignores demand/competition; C includes peripheral items; D is a vanity metric.

Reference: Principles of Marketing, Philip Kotler, Ch-10.

Prestige (image) pricing signals status/quality with higher, often rounded prices; odd–even positions are positioned just below thresholds to accentuate value. Reference prices and price–quality inference are well-documented effects.

A matches mechanisms; B false branding amplifies effects; C reversed; D false references come from past/list/competitor prices.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Pure bundling sells components only as a package (e.g., cable channel pack). Mixed bundling offers both the package and individual items for sale.

A textbook distinction; B reverses; C/D conflate unrelated concepts.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Required revenue = FC + VC×Q + Profit = 50,000 + (200×500) + 25,000 = 175,000. Price = 175,000 / 500 = Tk 350.

C exact; A/B under-recover; D overshoots the target profit at 500 units.

Reference: Principles of Marketing, Philip Kotler, Ch-10

Early-payment terms = cash discount; volume break = quantity; off-peak cut = seasonal; channel services rewarded = functional/trade allowance.

A correct mapping; B/C/D misclassify categories.

Reference: Principles of Marketing, Philip Kotler, Ch-11

Fences (such as time-of-use, advance-purchase, and Saturday-night stay) separate value segments and limit arbitrage. This is lawful when they are non-discriminatory and transparent. B/D are discriminatory; C is deceptive/unfair.

A classic lawful fence; B/D illegal/discriminatory; C breaches fairness/consumer-protection norms.

Reference: Principles of Marketing, Philip Kotler, Ch-11

%ΔQ = E × %ΔP = –0.6 × +10% = –6%. Revenue ≈ %ΔP + %ΔQ = +10% – 6% = +4%. With inelastic demand (|E|<1), raising the price increases revenue.

A  matches the calculation; B/D flips the sign; C ignores elasticity math.

Reference: Principles of Marketing, Philip Kotler, Ch-10

A fighting brand must segment-protect: clear brand architecture, positioning, sometimes separate channels/cost structure, and predefined monitoring/kill-switch. Blurring with the flagship risks of cannibalization and brand dilution.

A states best practice; B is illogical; C contaminates the flagship; D ignores governance.

Reference: Principles of Marketing, Philip Kotler, Ch-11