A clothing store opens in a small college town, next to a large discount clothing store. The new store owner wants her customers to think her clothing is high quality so she sets the prices very high and displays pictures of models wearing her clothing. The store goes out of business shortly after opening. What was the flaw in the store owner's plan?

Question

A clothing store opens in a small college town, next to a large discount clothing store. The new store owner wants her customers to think her clothing is high quality so she sets the prices very high and displays pictures of models wearing her clothing. The store goes out of business shortly after opening. What was the flaw in the store owner's plan?

She should have thought about the pricing of the nearby stores instead of hoping customers would buy into her marketing.
She did not target the right group of buyers and should have focused on students who like fashion more than other groups.
She should have focused her marketing plan on one or two groups rather than a broad range of buyers.
She should have over-priced her clothes but then offered steep discounts for return shoppers only.

Answer 1

The flaw in the store owner's plan was that she set the prices very high. The explanation for this is that opening a clothing store next to a large discount clothing store suggests that the customers in the area are looking for affordable options. By setting high prices, the store owner failed to understand the pricing preferences of the target market. Instead of attracting customers, the high prices likely deterred potential buyers who were seeking affordable clothing options. The store owner's strategy may have contributed to the store going out of business shortly after opening. Therefore, the correct option is "She should have thought about the pricing of the nearby stores instead of hoping customers would buy into her marketing."