Future Business Leaders of America (FBLA) Marketing Practice Test

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Which method can be used to change prices?

Market research
Allowances
Competitive analysis
Consumer feedback

The correct answer is: Allowances

Allowances are a common method used to change prices, especially in the context of marketing and sales strategies. An allowance typically refers to a reduction in the price of a product, often used to promote sales or encourage customer purchases. This could include trade allowances, promotional allowances, or even seasonal discounts aimed at increasing sales volume or market share. By offering allowances, a business can effectively adjust the perceived price point of their product, incentivizing customers to choose their offering over competitors. This method can be particularly effective when fostering customer loyalty, moving excess inventory, or responding to changes in market demand. Market research and competitive analysis help understand the pricing landscape and consumer preferences, but they do not directly change prices. Consumer feedback may inform pricing decisions or suggest areas for discounts, yet it is not a direct mechanism for altering prices like allowances are.