MGMA01H3 Chapter Notes - Chapter 11: Predatory Pricing

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1 Apr 2011
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Price charge = between too high to product any demand and too low to produce profit. Customer perceptions of the product value = price ceiling. When setting prices, the company must consider internal and external factors, including overall marketing strategy and mix, the nature of the market and demand, and competitors" strategies and prices. Other i nternal and external consideration affecting price decisions www. notesolution. com. Internal factors affecting pricing include the company"s overall marketing strategy, objectives, and marketing mix, as well as other organizational considerations. Pricing strategies usually change as the product passes through its life cycle. Initiating price changes: must anticipate buyer and competition reactions i. Initiating price cuts: excess capacity; falling demand in the face of strong price competition ii. Improve quality and increase price: launch a low-price fighting brand . Several laws restrict pricing practices and companies must also consider broader societal pricing concerns (1) to foster a competitive environment (2) to protect consumers.

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