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A watch manufacturer uses price-skimming strategies and provides a lifetime warranty on their products - HSC - SSCE Business Studies - Question 4 - 2022 - Paper 1
Question 4
A watch manufacturer uses price-skimming strategies and provides a lifetime warranty on their products. What would most likely have influenced the implementation of ... show full transcript
Worked Solution & Example Answer:A watch manufacturer uses price-skimming strategies and provides a lifetime warranty on their products - HSC - SSCE Business Studies - Question 4 - 2022 - Paper 1
Step 1
What would most likely have influenced the implementation of these strategies?
Answer
The implementation of price-skimming strategies in the context of a watch manufacturer is greatly influenced by quality expectations. Price-skimming often relies on the perception of high quality to justify premium pricing. Consumers expect durable and high-quality products, especially when a lifetime warranty is offered. This aligns with the manufacturer's intention to position their products as premium offerings in the market.