How to ethically steal your competitor's biggest facebook fans
How Should A Company Respond To A Competitor's Price Change?
-
Upload
anurag-kar -
Category
Marketing
-
view
34 -
download
2
Transcript of How Should A Company Respond To A Competitor's Price Change?
How should a company respond to a competitor’s price change?
By,
Anurag Kar
B.Tech. Student
Department of E and ECE
IIT Kharagpur
Based on Chapter 3: Developing Pricing
Strategies and Programs
Of
Marketing Management: A South Asian
Perspective
By Kotler, Keller, Koshy and Jha
The response varies with the situation.
Companies must consider…
Product’s stage in
life cycleIts importance in the
company’s portfolio
Company’s
alternative
opportunities.
Market’s price and
quality sensitivity
Competitor’s
intentions and
resources
Behaviour of costs
with volume
I n t o A c c o u n t
Product’s stage in
life cycleIts importance in the
company’s portfolio
Company’s
alternative
opportunities.
Market’s price and
quality sensitivity
Competitor’s
intentions and
resources
Behaviour of costs
with volume
The response will be different for
HomogenousMarkets
Non HomogenousMarkets
Homogenous Markets
The firm can search for ways to enhance
its augmented product. If it cannot find
any way, then it may need to meet the
price reduction.
Non Homogenous Markets
Certain questions need to be answers for
responding in such markets.
?
Why did the competitor change the price?
Does the competitor plan to make the price change temporary or permanent?
What will happen to the company’s market share and profits if it does not respond?
What are the competitors’ and other firms’ responses likely to be to each possible reaction?
Market leaders often face aggressive price cutting
by smaller firms trying to build market share.
For example…
Vs
Vs
Possible responses to low cost competitors
Further
differentiate the
product or service
Introduce a low
cost venture
Reinvent as a low
cost player
Recap
Pictures Sourced from:
www.flickr.com
www.pinterest.com
http://commons.wikimedia.org
www.theguardian.com
Fonts Sourced from:
www.fontsquirrel.com
Based on “Marketing Management: A South Asian Perspective”
By Kohler, Kelter, Koshy and Jha
Credits