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Predatory pricing is a commercial pricing strategy which involves the use of large scale undercutting to eliminate competition. This is where an industry dominant firm with sizable market power will deliberately reduce the prices of a product or service to loss-making levels to attract all consumers and create a monopoly. [1]
Post-pricing separates the buying decision and the pricing decision. [31] Consuming a product, call it a good, reduces information asymmetries about the good's quality, so the buyer is informed of the product's quality when they decide what to pay.
Pricing strategies and tactics vary from company to company, and also differ across countries, cultures, industries and over time, with the maturing of industries and markets and changes in wider economic conditions. [2] Pricing strategies determine the price companies set for their products. The price can be set to maximize profitability for ...
Price Intelligence (or Competitive Price Monitoring) refers to the awareness of market-level pricing intricacies and the impact on business, typically using modern data mining techniques. It is differentiated from other pricing models by the extent and accuracy of the competitive pricing analysis. [ 1 ]
Understanding the competition is crucial in deciding what product or service to offer. Gathering information about how competitors are performing in the market, what customers think of the different products available, and what is missing in the market through conducting research using different methods such as SWOT and PEST analyses. [11]
"Pricing is competitive. We're seeing the pricing in the category more normalized, and that allows us to compete effectively and continue to grow all three brands, which are showing solid ...
The concept of supracompetitive pricing is connected to the concept of predatory pricing. Predatory pricing can be defined as a dynamic market strategy that is characteristic in a single market where a company decides to develop a business strategy that includes the sacrifice in a short run in order to eliminate existing competition and acquisition of a dominant market position where the ...
Contestable markets are characterized by "hit and run" competition; if a firm in a contestable market raises its prices so as to begin to earn excess profits, potential rivals will enter the market, hoping to exploit the high price for easy profit. When the original incumbent firm(s) respond by returning prices to levels consistent with normal ...