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Zone pricing (also zonal pricing) is a variant of the uniform pricing: the prices are the same within a "zone" (a geographical slice of the market), prices increase with the costs of shipping and reflect the average delivery cost inside the zone. This is the approach taken, for example, by the parcel delivery services. The zone pricing reduces ...
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 ...
Geographic Practice Cost Index is used along with Relative Value Units by Medicare to determine allowable payment amounts for medical procedures. There are multiple GPCIs: Cost of Living, Malpractice, and Practice Cost/Expense.
Examples of the SGA: Extent of product (or service) diversity. Extent of geographic coverage. Number of market segments served. Distribution channels used. Extent of branding. Marketing effort. Degree of vertical integration. Product (or service) quality. Pricing policy. Use of Strategic Group Analysis This analysis is useful in several ways:
Base point pricing is the system of firms setting prices of their goods based on a base cost plus transportation costs to a given market. [1] Although some consider this a form of collusion between the selling firms (it lowers the ability of buying firms to gain a competitive advantage by location or private transportation), it is common practice in the steel and automotive industries.
In Hotelling's Location Model, firms do not exercise variations in product characteristics; firms compete and price their products in only one dimension, geographic location. Therefore, traditional usage of this model should be used for consumers who perceive products to be perfect substitutes or as a foundation for modern location models.
In 1982 the U.S. Department of Justice Merger Guidelines introduced the SSNIP test as a new method for defining markets and for measuring market power directly. In the EU it was used for the first time in the Nestlé/Perrier case in 1992 and has been officially recognized by the European Commission in its "Commission's Notice for the Definition of the Relevant Market" in 1997.
This can include new geographical markets, new distribution channels, and different pricing policies that bring the product price within the competence of new market segments. Diversification is the riskiest area for a business. This is where a new product is sold to a new market. [66] There are two type of Diversification; horizontal and vertical.