DECA Sports and Entertainment Marketing Practice Exam

What is the term for pricing that is influenced by consumer perception?

1. Discount pricing

2. Prestige pricing

3. Value pricing

4. Competitive pricing

The correct answer is: Prestige pricing

Prestige pricing is a strategy where prices are set higher than the competition to enhance a brand's image and convey a sense of exclusivity and luxury. This approach is built on the understanding that certain consumers associate higher prices with superior quality or status. Thus, the perception of worth is a critical factor in this pricing method. For products sold using prestige pricing, the focus is on creating a high-value perception that aligns with consumer desires for uniqueness, quality, and status. In contrast, discount pricing aims to attract price-sensitive consumers, value pricing focuses on providing a fair price relative to perceived benefits, and competitive pricing is centered around matching or slightly undercutting competitors' prices to maintain market share. While these alternatives consider pricing logic, they do not primarily leverage consumer perception to define their strategies as prestige pricing does.