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Product pricing may depend heavily on the productivity of a manufacturing facility (e.g., how much can be produced within a certain period of time). The marketer knows that increasing productivity can reduce the cost of producing each product and thus allow the marketer to potentially lower the product's price.
However, increasing productivity might require large changes at the manufacturing facility that will take time and money and will not translate into lower price products for a considerable period of time.
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Follow the leader pricing?
Follow-the-leader pricing is a pricing strategy where a company sets its prices based on the prices set by a dominant competitor in the market. This approach is often used in oligopolistic markets, where a few firms have significant market power and closely monitor each other’s pricing decisions. By aligning their prices with the leader, firms aim to maintain market share and avoid price wars. However, this strategy can limit price competition and innovation within the industry.
What are the factors affecting market structure?
Market structure is influenced by several key factors, including the number of firms in the industry, the type of products offered (homogeneous or differentiated), the ease of entry and exit for new firms, and the degree of market power held by individual firms. Additionally, consumer preferences, technological advancements, and regulatory policies can significantly shape the competitive landscape. The interplay of these factors determines whether a market is classified as perfect competition, monopolistic competition, oligopoly, or monopoly.
Using contract manufacturing as a strategy to reach global markets offers firms the advantage of?
Reducing Risks
What are advantages of limit pricing?
Limit pricing can deter potential competitors from entering a market by setting prices low enough to make entry unprofitable, thus protecting a firm's market share. This strategy allows established firms to maintain their dominance and reduce competition, leading to greater long-term profitability. Additionally, limit pricing can help stabilize prices within the industry, benefiting consumers in the short term through lower prices. However, it requires careful management to avoid eroding profit margins significantly.
How pricing theory helps in formulating pricing policy?
Pricing theory provides a framework for understanding how prices are determined in the market based on factors like supply and demand, competition, and customer perceptions. By applying these principles, businesses can develop pricing policies that align with their strategic goals, optimize profit margins, and respond effectively to market conditions. Additionally, pricing theory helps in evaluating the impact of different pricing strategies, such as penetration or skimming, allowing firms to make informed decisions that enhance their competitive advantage. Ultimately, it aids in setting prices that reflect both the value offered to customers and the costs incurred by the business.
Microeconomic factors affecting profit making firms?
i dont know what does profit affect microeconomics
Follow the leader pricing?
Follow-the-leader pricing is a pricing strategy where a company sets its prices based on the prices set by a dominant competitor in the market. This approach is often used in oligopolistic markets, where a few firms have significant market power and closely monitor each other’s pricing decisions. By aligning their prices with the leader, firms aim to maintain market share and avoid price wars. However, this strategy can limit price competition and innovation within the industry.
What external forces influence a firms strategy?
External forces that influence a firm's strategy include economic conditions, competitive dynamics, regulatory changes, and technological advancements. Market trends and consumer preferences also play a significant role, as they can shift demand and necessitate adjustments in strategy. Additionally, political stability and global events can impact strategic decisions by affecting market access and operational risks. Understanding these external factors is crucial for firms to adapt and remain competitive in their respective industries.
What factors contribute to the establishment of a competitive equilibrium in the market?
Factors that contribute to the establishment of a competitive equilibrium in the market include supply and demand dynamics, pricing mechanisms, competition among firms, consumer preferences, and government regulations.
What competitive environmental forces influence the firms strategy?
The competitive environmental forces influence the firms customers, rival firms, new entrants, substitutes, and supplies.
Why do firms use cost price pricing for supply contracts?
They are guaranteed a profit.
Who own the factor of production?
Business firms own the factors of production.
What are the factors affecting market structure?
Market structure is influenced by several key factors, including the number of firms in the industry, the type of products offered (homogeneous or differentiated), the ease of entry and exit for new firms, and the degree of market power held by individual firms. Additionally, consumer preferences, technological advancements, and regulatory policies can significantly shape the competitive landscape. The interplay of these factors determines whether a market is classified as perfect competition, monopolistic competition, oligopoly, or monopoly.
Why do many firms use cost plus pricing for supply contracts?
They are guaranteed a profit.
social issue phase?
effective and correct practices affecting the bottom line of firms
In a monopolistic competition market firms usually sell products that are?
In a monopolistic competition market, firms typically sell products that are differentiated, meaning they are similar but not identical. This differentiation can be based on factors such as quality, features, branding, or customer service, which allows firms to have some degree of pricing power. As a result, each firm faces a downward-sloping demand curve for its unique product, leading to competition not just on price but also on non-price factors.
What are some good IT consulting firms in London?
There are many good IT consulting firms located in London, England. Firms such as Bain and Company, Oliver Wyman, OC and C Strategy, and Candesic are all good IT Consulting Firms in London.
