ACCA Performance Management (F5) Certification Practice Exam

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What does complementary-product pricing strategy involve?

Pricing strategies for multiple product lines
Enhancing the sales of one product by pricing another product
Price differentiation in various markets
Setting high prices for related products

The correct answer is: Enhancing the sales of one product by pricing another product

Complementary-product pricing strategy focuses on how the pricing of one product can influence the sales of another product that complements it. This strategy exploits the relationship between products that are used together, where the price of one item may enhance or detract from the sales potential of another. For example, if a company prices printers competitively, it might simultaneously raise the price of ink cartridges—relying on customers needing both. By understanding the relationship between these products, businesses can set prices strategically to maximize overall sales and profitability. This strategy emphasizes the interdependencies between products and how consumer behavior shifts when the pricing of complementary goods is altered. Thus, it harnesses the potential synergies that can exist when deciding on product pricing and aims to increase total revenue through smart pricing tactics.