Topic 5 cs of pricing 234 p 279 why are price wars

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Topic: 5 Cs of Pricing 234. (p. 279) Why are price wars more common in oligopolies than in pure competition markets? In oligopolies, there are only a few firms. Each firm keeps track of the others, knowing price cuts by one firm affect their market share. In pure competition, there are many small producers. The actions by one small firm do not affect the market. AACSB: Analytic Blooms: Understand Difficulty: 2 Medium Learning Objective: 13-05 Indicate the four types of competition. Topic: 5 Cs of Pricing 235. (p. 282) What is cross-shopping and what does it mean for marketers' pricing strategy? Cross-shopping is the pattern of consumers buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price-oriented retailers. It means marketers have to respond to differing perceptions of value in their pricing strategies. Also,
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marketers should look beyond their traditional target markets for customers. AACSB: Analytic Blooms: Understand Difficulty: 2 Medium Learning Objective: 13-01 List the four pricing orientations. Topic: Macro Influences on Pricing 236. (p. 283) What does an everyday low prices strategy say to consumers? It suggests that, overall, prices will be lower but not necessarily for every item. AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-06 Describe the difference between an everyday low price strategy (EDLP) and a high/low pricing strategy. Topic: Pricing Strategies 237. (p. 283) What is the experience curve effect? What pricing strategy is it associated with? The experience curve effect refers to a situation where unit costs decrease as production or sales volume rises. It is associated with a market penetration pricing strategy. AACSB: Analytic Blooms: Understand Difficulty: 2 Medium Learning Objective: 13-07 Explain the difference between a market penetration pricing strategy and a price skimming pricing strategy. Topic: Pricing Strategies
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