Accounting MRK108 Chapter 19.2: Part 2 MRK108 Chapter 19
27 Dec 2016
School
Department
Course
Professor
Document Summary
Penetration pricing - a relatively low price for a product initially as a way to reach the mass market. To get large share of the market, resulting in lower production costs. Grows only if market grows or if competitors don"t respond. Big advantage discourages/blocks competition from entering a market. Disadvantage is getting the ability to mass produce and failing like being left with the production factory. Can destroy brands image omega lowered it prices to try to beat. Rolex, resulting not being perceived again by upscale buyers. Also called meeting the competition or going-rate pricing. Means charging a price identical to or very close to the competition"s price. Need to be aware of laws within competition act before establishing any strategy. Competition act - legal and ethical issues relating to deception of pricing, price fixing, predatory pricing, resale price maintenance, and price discrimination. Deception pricing promoting a price or price saving that is not actually available.
