The ______ pricing strategy features frequent sales, during which prices are lowered for a short time.

• A. Dynamic pricing
• B. Premium pricing
• C. Value-based pricing
• D. High/low

Answer: (D)

High/low pricing centers on alternating between higher regular prices and frequent, short-term price reductions through sales and promotions. This approach draws shoppers in with the anticipation of a deal while maintaining higher prices outside of sale periods, which can boost average margins. It also creates traffic and impulse purchases during promotions, helping retailers move inventory and generate excitement around promotions.

Other strategies don’t revolve around regular, temporary price cuts. Dynamic pricing adjusts prices in real time based on demand and other factors, not tied to scheduled sales. Premium pricing keeps prices high to signal quality or status rather than offering frequent discounts. Value-based pricing sets price according to perceived value to the buyer, without the recurring discount pattern.