Asked by Angel Dignadice on Sep 24, 2024
Verified
Which of the following is an example of the "damaged goods" strategy
A) A doll company selling dolls at cost but charging high margins on doll accessories
B) A cell phone company offers free locked in phones but charges high prices per call
C) A catering company pays its chefs higher wages to make sure that the bargain meals are just slightly burnt
D) None of the Above
Damaged Goods
Products that have been impaired or harmed in some way, reducing their value, usefulness, or appeal.
High Margins
Refers to a significant difference between the cost of goods sold and the selling price, leading to high profits.
- Distinguish the approaches such as "damaged goods," "metering," and "bundling" utilized by corporations to amplify their profits.
Verified Answer
SS
Shubham Sharma2 days ago
Final Answer :
C
Explanation :
The damaged goods strategy involves intentionally lowering the quality of a product or service in order to sell it at a lower price point. Option C fits this definition as the catering company pays its chefs higher wages to ensure that the bargain meals are slightly burnt, making them less desirable and therefore cheaper for consumers. Option A involves charging high margins on accessories, which is not related to the quality of the dolls or their primary function. Option B involves charging high prices per call, which is not related to the quality of the phones themselves. Option D is not a valid answer as one of the options must be chosen.
Learning Objectives
- Distinguish the approaches such as "damaged goods," "metering," and "bundling" utilized by corporations to amplify their profits.