LECTURE 13: COMPETITION AND PRICING Price wars – firms reducing prices in order to lure consumers Classifications of Competitive Behavior – Cooperative Pricing (monopolistic competition, recognize a common interest) Adaptive Pricing (small firms take prices set by large firms) Opportunistic Pricing (use price to gain market share) Predatory Pricing (a firm uses low price attempting to punish another firm or drive it out of business) Limit Pricing (discourage entry of potential competition, 2 purposes: alert potential entrant, limit profit margin) LECTURE 14: CHANNELS AND PRICING Marketing channel – consists of individuals and firms involved in the process of making a product or service available for sure or consumption by consumers or industrial users. Make possible the flow of goods from a producer, through intermediaries, to a buyer (some intermediaries purchase items from seller, store them and then resell to buyers and some represent buyers but don’t take title to the product), Important because 1) create transaction efficiency-save 50% of transaction 2) create form, time, place and possession value for consumer … the more channels there are, the more costly it is, but gain more consumers because more available Wholesale Price – percentage kept by wholesaler from wholesaler price Push Strategy – company/producer tries to move products through the cannel by convincing channel members to offer, feature, or display those products…producer->retailer->customer…advertising info is direct at the retailer, strategy focus on specific retail establishment, producers pay retailer Push Tools (trade) – off invoice allowances (special disc. To retailers for special activities that benefit the manufacturer), quantity discounts, dating, floor planning
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