Photo AI
A fast food restaurant is currently charging a price of 60p for its new healthy snack - OCR - GCSE Business - Question 2 - 2019 - Paper 1
Question 2
A fast food restaurant is currently charging a price of 60p for its new healthy snack. The fast food restaurant intends to increase the price to £2.25 once the healt... show full transcript
Worked Solution & Example Answer:A fast food restaurant is currently charging a price of 60p for its new healthy snack - OCR - GCSE Business - Question 2 - 2019 - Paper 1
Step 1
The current price is an example of:
Answer
In this context, the fast food restaurant is initially charging 60p for a new product, which indicates a strategy to attract customers through a low introductory price. This pricing method is often referred to as 'penetration pricing,' where a company sets a low price to enter a competitive market and gain market share. Once the product becomes popular, the company plans to raise the price to £2.25. Therefore, the correct answer is:
C. Penetration pricing.