Product Mix Pricing Strategies

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Product line pricing is the establishing of prices for all items in a product line. Companies normally develop product lines rather than single products and introduce price steps. In many lines of trade, sellers use well-established price points for the products in their line. For example a men's clothing store might carry suits at 3 levels--$300, $500 and $750. Customers consequently will associate low, average, and high quality suits with three price points. The seller's task is to establish perceived quality differences that justify the price ...