Question

BoltBus aims to price its services in such a way that it offers its customers more value than travelling by airplane, car, or other bus companies. To which of the following pricing strategies is this most similar?

a.Competitive pricing b.Skimming pricing c.Odd pricing d.Penetration pricing

Which of the following forms the primary target audience for BoltBus?

a.Families with young children b.Young adults in the 18-34 age bracket c.Businesspeople who travel for work d.Older people who cannot afford high air fares

If BoltBus priced its services far below those of competitors in order to gain an entry into the market, the company would be using a _____ pricing strategy.

a.penetration b.odd c.unit d.skimming

The $1-ticket strategy is an example of _____.

a.everyday low pricing b.skimming pricing c.promotional pricing d.odd pricing

Which of the following best describes BoltBus’ pricing strategy?

a.The company modifies its prices based on demand, with higher prices during times of peak demand. b.The company makes use of the psychological pricing techniques of odd pricing and unit pricing. c.The company prices its services over competing services in order to take advantage of prestige pricing. d.The company charges all customers the same price, regardless of location.

BoltBus monitors competitors’ pricing to make sure that the company remains competitive. If a competitor were to raise prices and then waited to see if competitors like BoltBus followed suit, that company would be using:

a.a step out. b.odd pricing. c.a trade-in. d.unit pricing

Answer 1

Solution:

• Option D
  Penetration pricing because the bus operator is providing more value to the customers meaning the bus operator is providing low-cost tickets to the consumers to provide them more value and hence compete with other modes of transport. This is a case of penetration pricing. Hence, option D is correct.
  
• Option B
  The probable target audience for the company will be the ones who are actively traveling and are looking for value deals to match their budget travel. Businesspeople will seldom travel by bus to save on their time. Old people will travel very less by buses because of their health conditions. Hence, the probable target audience is young adults in the age group of 18-34. Hence, option B is correct.
  
• Option A
  The pricing strategy where the company prices its products relatively lower to capture the market and make an entry into the market. This strategy is known as a penetration strategy because the product is penetrated in the market at very low prices. Hence, option A is correct.
  
• Option C
  $1 tickets is a kind of promotional activitiy and hence this is a promotional pricing where the pricing will be valid for the duration of the promotional campaign. HEnce, option C is correct.

**Can solve only first four as per Chegg policy**

Answer 2

1. Pricing Strategy: a. Competitive pricing

BoltBus aims to offer its customers more value than travelling by airplane, car, or other bus companies. Competitive pricing is a strategy where a company sets its prices based on the prices of its competitors to attract customers by offering similar or better value at a competitive price.

2. Primary Target Audience: b. Young adults in the 18-34 age bracket

The primary target audience for BoltBus is likely to be young adults in the 18-34 age bracket who are looking for affordable and convenient transportation options.

3. Pricing Strategy (if priced far below competitors): a. Penetration pricing

If BoltBus priced its services far below those of competitors to gain entry into the market, it would be using a penetration pricing strategy. This involves setting lower initial prices to quickly gain market share and attract a large number of customers.

4. $1-ticket strategy example: c. Promotional pricing

The $1-ticket strategy is an example of promotional pricing, where a company offers temporary discounts or special offers to attract customers and create buzz around its services.

5. BoltBus' Pricing Strategy: b. The company makes use of the psychological pricing techniques of odd pricing and unit pricing.

BoltBus uses psychological pricing techniques such as odd pricing (ending prices with odd numbers like $0.99) and unit pricing (charging a single price for a bundle of services) to influence customer perception and attract more customers.

6. Competitor's pricing monitoring: a. A step out.

If a competitor raises prices and waits to see if competitors like BoltBus follow suit, they are using a step-out strategy. This involves a company making the first pricing move and then observing competitors' responses before making further pricing decisions.

Answer 3

1. Pricing Strategy: The pricing strategy that BoltBus aims to use, offering more value than travelling by airplane, car, or other bus companies, is most similar to "Penetration pricing" (Option a). Penetration pricing involves setting lower prices initially to enter the market and gain a significant market share.

2. Primary Target Audience: Based on the information provided, the primary target audience for BoltBus is likely "Young adults in the 18-34 age bracket" (Option b). This is because the company aims to offer more value than other transportation options, which may be particularly appealing to young adults who are looking for affordable and convenient travel options.

3. Pricing Strategy for Entry into the Market: If BoltBus priced its services far below those of competitors to gain entry into the market, the company would be using a "Penetration pricing" strategy (Option a). This strategy is often used to attract customers and build market share quickly.

4. $1-Ticket Strategy: The $1-ticket strategy is an example of "promotional pricing" (Option c). Promotional pricing involves offering temporary discounts or special offers to attract customers and create excitement around the product or service.

5. BoltBus' Pricing Strategy: Based on the information provided, the best description of BoltBus' pricing strategy is that "The company modifies its prices based on demand, with higher prices during times of peak demand" (Option a). This suggests that BoltBus uses dynamic pricing, adjusting prices based on factors like demand and time of travel.

6. Monitoring Competitors' Pricing: If a competitor were to raise prices and then waited to see if competitors like BoltBus followed suit, that company would be using a "step out" strategy (Option a). In this strategy, a company takes the lead in changing prices to test the market and see how competitors react before fully committing to the price change.

7.