At the end of summer, the Gloomin' Garden Inc. reduced the price on all of its plants, fertilizers, and potting soil by 50 percent in order to liquidate this inventory. What type of pricing strategy has been used by Gloomin' Garden Inc.?
a. Supply oriented pricing
b. Sales maximization
c. Target return on investment
d. Satisfactory profit
ANSWER: b
The type of pricing strategy used by Gloomin' Garden Inc. is sales maximization. A firm with the objective of maximizing sales ignores profits, competition, and the marketing environment as long as sales are rising. Sales maximization can also be effectively used on a temporary basis to sell excess inventory.
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