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Pricing Strategies: Additional Considerations - Price Changes

5 important questions on Pricing Strategies: Additional Considerations - Price Changes

Name 3 types of starting price changes?

1. Starting price cuts
2. Starting price increases
3. Buyers reaction

When can companies decide to start with price cuts? Name 3.

1. When demand for their product falls
2. When economy faces downturns
3. When firm wants to follow low-cost strategy to gain more market share

When can companies start with price increases? Name 2.

1. Over demand and inability to supply the market
2. Higher production costs

What is important to be aware of when increasing prices? Name 2.

1. Accompanied by communication
2. Should be reasonable and fair compared to competitors

What 4 options are there when competitors decrease their price to cut your profits?

1. Reduce price as well and match competitors (only when market share is lost when price stays the same) and quality should be the same.
2. Keep the same price but increase perceived value of the product
3. Increase the quality of the product which increases perceived value and justifies the higher price.
4. Presenting a low-price brand or adding a low-price item to the line