Which pricing strategy is aimed at stimulating demand?

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The strategy aimed at stimulating demand is variable cost pricing. This approach focuses on setting prices based on the variable costs of producing a product, which can create a more competitive price point that encourages more buyers to make a purchase. By covering the variable costs and perhaps pricing products lower than traditional fixed cost-based pricing, a company can attract price-sensitive customers.

Variable cost pricing is particularly effective in markets where demand is elastic, meaning that customer demand increases significantly when prices decrease. This strategy allows businesses to quickly adjust prices in response to changes in market demand and to compete aggressively for customer attention.

In contrast, a price war often leads to unsustainable low prices that can erode profits rather than stimulate demand in a meaningful or strategic way. Parity pricing focuses on matching competitors’ prices to maintain market position without necessarily driving additional demand. Dynamic pricing involves adjusting prices based on real-time supply and demand conditions but does not inherently aim to stimulate demand unless it's in response to revealing consumer behavior trends.

Thus, variable cost pricing stands out as a strategy specifically designed to lower barriers for customers, thereby stimulating demand effectively.

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