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What might make it difficult to determine the prices of one’s competitors? When such difficulties occur, what could be done to surmount them?
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- Discuss the relationship of price to value. Does a low price necessarily mean a better value? Give an example to illustrate your opinion. How can a firm offer good value in a mature market where price seems to be the only visible means of differentiation?What are the possible problems that will be encountered if a firm uses | perceived-value pricing and lets the market determine the price of its products?To what extent is the price most important factor in ensuring a company can maximise profits?
- A business knows that over a long-term period of time, it must ultimately set its prices above what factors? ExplainShould a company always respond to a competitor’s price cut, and what options are available if it does decide to respond?Many successful retailers use a loss leader pricing strategy, in which they advertise an item at a price below their cost and sell the item at that price to get customers into their store. They feel that these customers will continue to shop with their store and that they will make a profit in the long run. Do you consider this an unethical practice? Who benefits and who is hurt by such practices? Do you think the practices should be made illegal, as some states have done? How is this different from bait-and-switch pricing?