Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?

Question

Cloe Gallagher

Business

18 May, 10:06

Steinway produces concert grand pianos, often using the custom materials and designs desired by a specific customer. The average price of these pianos runs about $50,000 depending on the exact piano. What type of pricing does Steinway most likely use for these pianos?

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Answers (1)

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Malcolm Harper · Answer 1

Cost-Plus

Explanation:

Cost plus pricing is a system of determining the selling price of an item by adding a determined amount called mark-up to the total cost of producing the item. Its purpose is to ensure that cost are fully recovered and profit are also made.

In a less competitive environment like Steinway's own, where pianos are being produced to the specification of waiting customers, this gives a good opportunity for cost plus marketing as threats from competitors are minimal or even nil.