Ch 24 Price, Distribution and Risk Management.docx

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Management and Organizational Studies
Management and Organizational Studies 2275A/B
Frederick King

Price, Distribution and Risk Management 12/12/2012 1:26:00 PM Chapter 24 Price  Pricing practices between producer and purchaser o The federal Competition Act prohibit unfair practices and seeks to create a level playing field o Price conspiracies  When businesses manipulate a market through conspiring with direct competitors to control prices  Penalties include 14 years imprisonment and/or a fine of $25 million o Bid rigging – conspiring to fix the bidding process to suit the collective needs of those submitting bids o Abuse of dominant position  When a dominant company or group of companies have engaged in anticompetitive behaviour the unduly prevents or lessens competition  Penalties up to $10 million  Price discrimination – the failure to provide similar pricing in terms and conditions to competing retailers for equivalent volume sales at a similar time  Predatory pricing – setting unreasonably low prices to eliminate competition o Price maintenance – the attempt to drive the final retail price of goods upward and the imposition of accusation on noncompliant retailers  Pricing practices between seller and consumer o Sale or bargain prices – it is an offence for the seller to state that a price is less than the ordinary price when it isn’t o An advertiser may claim the price to be the ordinary price if:  Volume test – they sold a substantial volume of the product within a reasonable period of time before or after making the representation  Time test – they offered the produced for sale in good faith for a substantial period of time recently before or immediately after making the representation o Double ticketing – failing to sell at the lower of the two or more prices marked on or otherwise appearing with regard to a product Distribution 
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