Reference no: EM132475085
FORCES ON COMPETITIVE PRICING
Firms need to take care when responding to competitor's action with a pricing change, as this could trigger a potential price war. For the below goals, identify what would be the most appropriate pricing reaction.
For each of the below situations, explain how the firm should respond; reduce prices, do not change prices, or increase prices. Identify your strategy and explain your answer.
a. To communicate the high quality of your product against a new competitor
b. The market that the firm operates in is deregulated, allowing more competitors to enter
c. A new substitute product emerges
d. The company experiences a major increase in production costs
e. Your executive team has a strong indication that key competitors will always price match your goods / services
f. To significantly increase market share
g. Your leading product is experiencing high seasonal demand
h. A major competitor has recently left the market