In this activity, you'll look at some pricing policies companies use to make a profit while still attracting customers. For each of the pricing policies listed below, find and provide an example of a company that employs each specific policy. Briefly summarize the company and why you believe the company has chosen this policy. If you cannot find an acceptable example, describe what you believe the ideal company for this policy would be.

After completing these examples and descriptions, please answer the follow-up questions at the end.

Competitive Pricing Policy
With a competitive pricing policy, companies price their products based on what their competitors are charging. To implement such a policy, companies must research products already on the market that are similar to their own. Once they've familiarized themselves with the prices of these competing products, companies will then set a price for their own products that is either the same or lower than their competitors' products.

Loss Leader Pricing Policy
Using a loss leader pricing policy, companies choose a product to sell at a rock-bottom price to attract customers to their stores. This strategic pricing policy allows companies to make a profit on other items in their store, despite losing money on the loss leader.

Penetration Pricing Policy
Companies that use a penetration pricing policy price their products very low when they first start their business to enter, or "penetrate", the market. Even though they lose money at first, companies that successfully use penetration pricing distract consumers from their competitors and gain loyal customers that will continue to buy their products even when prices rise.

High-End Pricing Policy
A high-end pricing policy is used when companies believe that their target market equates quality with a high price and, therefore, prefers to pay more for a product that they believe to be superior to similar products on the market.