What is the floor price for Men's Sandals?

The correct answer, which indicates that the floor price for Men's Sandals is $10, is based on the pricing strategy that aims to establish a minimum acceptable price point for the product. This floor price serves several strategic purposes within the retail environment.

Firstly, setting a floor price helps ensure that the company can cover its costs associated with sourcing, stocking, and selling the sandals. If the price were set lower, the company might struggle to maintain profitability since it would not adequately account for expenses such as manufacturing, shipping, and overhead.

Additionally, having a minimum price helps to position the brand in the marketplace by conveying a certain level of quality. In retail, price can also signal value to customers; a floor price indicates that the sandals are of sufficient quality and durability, which can enhance customer perceptions and drive sales.

Setting the floor price at $10 allows Shoe Station to balance affordability with quality, making the product appealing to a wide range of customers while still sustaining healthy margins. This pricing strategy also considers market competition, consumer expectations, and economic conditions, leading to a well-rounded approach to pricing the product.