Topic

Developing Pricing Strategies and Programs

Instructions

What are the various responses to a competitor’s price change?

Answer Preview

A business organization considering a price change has to be concerned regarding the response of its competitors as well as its customers in the market. It is clear that rivals are most likely to respond when the product is uniform, and when the purchasers are well informed. When a business organization is reacting to a price change by a rival, it needs to consider numerous issues. When there is a decrease in price, they will deem that the business organization is attempting to steal the market. In addition to this, they will think that the business organization is performing poorly and it is attempting to boost its sales. They will also think that the business organization wants the entire industry to lower prices in order to stimulate total demand.

Word Count: 200