cCompetitor reacting to price changes Competitors are most likely to react when

Ccompetitor reacting to price changes competitors are

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c)Competitor reacting to price changesCompetitors are most likely to react when the number of firms involved is small, when the product is uniform, and when the buyers are well informed about productsand prices.The competitor might think that the company is trying to grab a larger market share,or that it’s doing poorly and trying to boost its sales. Or it might think that the company wants the whole industry to cut prices in order to increase total demand.d)Responding to price changes7.list and briefly describe the major legislation in Canada that affects marketers’ pricing decisions
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The main law governing business practices, including pricing, is the Competition Act. Its purposeis:to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economyto expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, to ensure that small and medium- sized enterprises have an equitable opportunity to participate in the Canadian economy to provide consumers with competitive prices and product choicesThe sections of the Competition Act that regulate pricing are Part VI: Offences in Relation to Competition and Part VII.1: Deceptive Marketing Practices.The Act prohibits price fixing, meaning that sellers must set prices without talking to competitors. The legal charge for offences of this nature is conspiracySection 47 of the Act also identifies bid rigging—where one party agrees not to submit a bid or tender in response to a call, or agrees to withdraw a bid or tender submitted at the request of another partySection 78 (abuse of dominant position), sellers are prohibited from using predatory pricingselling below cost with the intention of punishing a competitor, or gaining higher long-run profits by putting competitors out of business.The Competition Act seeks to prevent unfair price discriminationby ensuring that sellers offer the same price terms to customers at a given level of trade. (no matter the size of the company buying it, the price terms should be the same)Although functional discounts(offering a larger discount to wholesalers than to retailers) are illegal in Canada. In Canada, retailers and wholesalers are considered competing customers whomust receive proportionally equal promotional allowances.Laws also prohibit retail (or resale) price maintenance—a manufacturer cannot require dealers to charge a specified retail price for its product. But they can give a suggested priceDeceptive pricing practicesare outlined in Section 74 of the Competition Act. Deceptive pricing occurs when a seller states prices or price savings that are not actually available to consumers.Other deceptive pricing issues include scanner fraud andprice confusion.
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