Pharmacies are a new addition to Sam's Clubs. They could exert a greater influence on the marketplace for prescription drugs than their newness indicates. Sam's has a stated philosophy of marking up merchandise a maximum of 14 percent. When that philosophy is applied to prescription drugs, especially generics, warehouse club prices can be dramatically lower than those of conventional drugstores, supermarkets, or discount store pharmacies. Sam's is using a _____ strategy to convince consumers to use its pharmacies rather than its competitors.
A. penetration pricing
B. price-insensitive demand
C. price-skimming
D. price elasticity
E. cost bundling
Answer: A
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