Examples of predatory pricing in the following topics:
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- Predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market.
- However, It is usually difficult to prove that prices dropped because of deliberate predatory pricing rather than legitimate price competition.
- There must be substantial barriers to entry for new competitors for predatory pricing to succeed.
- Thus, they would not know predatory pricing is occurring.
- Low oil prices in the 1990's were considered a case of alleged predatory pricing.
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- Offensive Strategy: This strategy aims to adopt a policy of "destroyer pricing" to preempt the entry of new firms or drive away existing competitors.
- Also known as predatory pricing, this strategy is useful when competitors or potential competitors cannot sustain equal or lower prices without losing money.
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- Demand-based pricing, also known as customer-based pricing, is any pricing method that uses consumer demand - based on perceived value - as the central element.
- These include: price skimming, price discrimination, psychological pricing, bundle pricing, penetration pricing, and value-based pricing.
- Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time.
- Penetration pricing is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers.
- By definition, long term prices based on value-based pricing are always higher or equal to the prices derived from cost-based pricing.
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- Psychological pricing is a marketing practice based on the theory that certain prices have meaning to many buyers.
- Inferring quality from price is a common example of the psychological aspect of price.
- Another manifestation of the psychological aspects of pricing is the use of odd prices.
- We call prices that end in such digits as 5, 7, 8, and 9 "odd prices. " Examples of odd prices include: $2.95, $15.98, or $299.99 .
- Psychological pricing is one cause of price points.
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- Competition-based pricing describes a situation where a firm has a pricing policy that reflects the pricing decisions of competitors.
- Competition-based pricing describes the situation where a firm does not have a pricing policy that relates to its product, but reflects the pricing decisions of competitors.
- Similar to competition based pricing, going rate pricing reflects the price that is being used by most of the companies within the industry, an industry standard more or less.
- It can lead to price wars.
- Show the basis of competitor-based pricing as a general pricing strategy
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- Cost-based pricing is the act of pricing based on what it costs a company to make a product.
- Cost-based pricing is the act of pricing based on what it costs a company to make a product.
- Cost-based pricing involves setting a price such that:
- Cost-based pricing is included in what is considered the "3 C's" of pricing.
- Describe cost based pricing as it relates to general pricing strategies
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- High-low pricing is a strategy where most goods offered are priced higher than competitors, but lower prices are offered on other key items.
- High-low pricing is a method of pricing for an organization where the goods or services offered by the organization are regularly priced higher than competitors.
- The lower promotional prices are designed to bring customers to the organization where the customer is offered the promotional product as well as the regular higher priced products.
- High-low pricing is a type of pricing strategy adopted by companies, usually small and medium sized retail firms.
- The way competition prevails in the shoe industry is through high-low price.
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- Value-based pricing seeks to set prices primarily on the value perceived by customers rather than on the cost of the product or historical prices.
- Value-based pricing sets prices primarily, but not exclusively, on the value, perceived or estimated, to the customer rather than on the cost of the product or historical prices.
- How important is price?
- Examples include matching the price of competitors, a traditional price charged for a particular product, and charging a price that covers expected costs.
- Examine the rationale behind value based pricing as a pricing tactic
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- A list price must be close to the maximum price that customers are prepared to pay and yield the maximum profit for the retailer.
- Pricing is a key variable in micro-economic price allocation theory and part of the four "P's-" of the marketing mix; pricing, product, promotion and place.
- The manufacturer's suggested retail price (MSRP), list price or recommended retail price (RRP) of a product is the price which the manufacturer recommends to the retailer.
- Retailers must ask questions to set a list price.
- A good pricing strategy is one that strikes a balance between the price floor (the price below which the organization ends up in losses) and the price ceiling (the price beyond which the organization experiences a no demand situation).
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- We've been using the word "price" a lot.
- The price of an item is also called the price point, especially where it refers to stores that set a limited number of price points.
- Price is relatively less than the cost price.
- Service providers may present you with a fee list as opposed to a price tag if you ask for the price of their services.
- The price to ride a bus is expressed by the term "fare