Tater Tots is well-known in the marketing community for their strategic pricing. The history of this Ore Ida product goes back to 1953 when they took the shreds from making fries, compressed them, and started selling the output as a distinct product. Initially consumers weren't interested in the product as it was relatively inexpensive. It was only when the price was raised that they began flying off the shelves ... to the tune of 70 million pounds a year today.

In late 2017 Tater Tots decided to launch their product in Mexico. Contrary to popular belief in the US and Canada, Tater Tots are not a Mexican food, nor are they sold there. Ore Ida determined that the fixed costs of launching a Mexican manufacturing plant, establishing and maintaining distribution channels with Mexican retailers, and promoting the product will be $200,000 per year. The variable costs for shipping, labour, packaging will be $1 per unit. At 100,000 bags of Tater Tots, the cost per bag will be $3. Ore Ida is hoping for a 30% margin as a benchmark for the retail selling price (an additional $1 per bag). For ease of accounting, amounts are being set in US dollars and will be converted to pesos prior to launching the product.

Relative to their new market of Mexico, Tater Tots is in the Introduction stage of the Product Life Cycle. Given this perspective, which pricing strategy would be the best decision?

1. Positioining
2. Market penetration pricing
3. Cost plus
4. Competition based

If Ore-Ida decides to sell Tater Tots in Mexico as part of a package of other frozen foods including tamales, they are engaging in _______________pricing

1. Optional product pricing
2. Captive product pricing
3. Bundled pricing
4. Packaged pricing