RESPONDING TO COMPETITORS’ PRICE CHANGE
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RESPONDING TO COMPETITORS’ PRICE CHANGE
HOW SHOULD A FIRM RESPOND TO A COMPETITORS’ PRICE CUT?
THE COMPANY MUST CONSIDER:
PRODUCT’S STAGE IN THE LIFE CYCLE
COMPANY’S PORTFOLIO
THE COMPANY MUST CONSIDER:
COMPETITORS’ INTENTION AND RESOURCES
THE COMPANY MUST CONSIDER:
MARKET’S PRICE & QUALITY SENSITIVITY
THE COMPANY MUST CONSIDER:
BEHAVIOUR OF COSTS WITH VOLUME
THE COMPANY MUST CONSIDER:
ALTERNATIVE OPPORTUNITIES
THE COMPANY MUST CONSIDER:
HOMOGENEOUS MARKET
COST CUT? ENHANCE ITS AUGMENTED PRODUCT
COST RISE?MATCH THE PRICE ONLY IF BENEFICIAL TO INDUSTRY
NON-HOMOGENEOUS MARKET
ISSUES CONSIDERED IN NON HOMOGENEOUS MARKET
WHY DID THE COMPETITOR CHANGE PRICE ?
DOES HE PLAN TO MAKE THE PRICE CHANGE TEMPORARY OR PERMANENT ?
ISSUES CONSIDERED IN NON HOMOGENEOUS MARKET
WHAT WILL HAPPEN TO COMPANY’S MARKET SHARE & PROFIT ?
ISSUES CONSIDERED IN NON HOMOGENEOUS MARKET
WHAT ABOUT OTHER COMPANIES ? WILL THEY RESPOND ?
ISSUES CONSIDERED IN NON HOMOGENEOUS MARKET
LOW COST COMPETITORS
VS
VS
RESPONSE TO LOW COST COMPETITORSFURTHER DIFFERENTIATE THE PRODUCT OR SERVICE
INTRODUCE A LOW COST VENTURE
RESPONSE TO LOW COST COMPETITORS
REINVENT AS A LOW COST PLAYER RESPONSE TO LOW COST COMPETITORS
SUMMARY
THE FIRM FACING A COMPETITORS’ PRICE CHANGE MUST:
• UNDERSTAND COMPETITORS’ INTENT
•KNOW ABOUT HOMOGENEOUS AND NON HOMOGENEOUS PRODUCT
•TRANSFORM ITSELF OR DIFFERENTIATE ITSELF ACCORDING TO THE COMPETITOR
AKASH RANJAN PRADHANNIT ROURKELADURING A MARKETING INTERNSHIP BY PROF.SAMEER MATHUR IIM LUCKNOWWWW.IIMINTERNSHIP.COM
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