What is the name of the pricing scheme Amazon uses for products based on shipping speed?

Study for the Supply Chain Management Exam. Prepare with multiple choice questions, each question comes with detailed explanations. Ace your exam with confidence!

The correct answer pertains to the concept of "Menu pricing," which refers to a pricing strategy where prices vary based on different options and service levels providing customers the flexibility to choose based on their preferences. In the context of Amazon, this could relate to the varying shipping speeds and costs associated with each option. For example, customers may be presented with a menu of choices that includes different shipping speeds, such as standard or expedited delivery, each with its corresponding price.

Dynamic pricing, while relevant in many areas of e-commerce, involves changing prices based on real-time demand and market conditions rather than specifically related to shipping speed. Bundled pricing typically involves combining multiple products or services and offering them at a reduced price, which does not align with the specific shipping speed schemes employed by Amazon. Value-based pricing focuses on setting prices based on perceived value to the customer, rather than the logistics of shipping options.

Therefore, "Menu pricing" accurately captures the essence of Amazon's approach to pricing related to shipping speeds, as it allows customers to select a desired speed at a price that reflects that choice.

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